Starbucks Workers Union Agreement Signals Wage Hikes

Starbucks workers in unionized cafes are set to receive pay increases mirroring those of their nonunion counterparts from May 2022. This development comes as the major coffee retailer and the Workers United union took a step forward in resolving their bargaining deadlock that lasted longer than desired.

The wage adjustments represent a gesture of goodwill from Starbucks toward Workers United, an arm of the Service Employees International Union organizing over 300 company-owned Starbucks outlets. It will be interesting to see how the workers’ union and others respond to this current resolution on the matter.

Both parties disclosed a promising breakthrough following mediation discussions last week. These talks stemmed from a legal dispute triggered by Workers United’s social media post supporting Palestinians using Starbucks branding.

Starbucks and Workers United have agreed to commence talks on a foundational framework for collective bargaining agreements. This announcement signals a notable improvement in their relationship since the initial unionization of Starbucks in December 2021.

Under the pledge, Starbucks will increase wages for employees in unionized cafes. Those with tenure between two and five years will receive a 5% raise or 5% above the market’s starting rate, whichever is higher. Workers with over five years’ tenure will receive a 7% raise or 10% above the market’s start rate — again, whichever is higher.

These wage hikes were originally implemented in May 2022 under the leadership of former CEO Howard Schultz. Schultz’s combative stance against the union garnered criticism from various quarters, including politicians and customers. The current CEO, Laxman Narasimhan, has been in office for almost a year.

In addition to wage increases, Starbucks has announced that unionized cafes will now have access to credit card tipping, a perk previously exclusive to nonunion stores for over a year. This move is a fair implementation that should further bridge the unequal gap between union and nonunion workers.