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Howard Schultz

Howard Schultz. Photo: Gage Skidmore / Wikimedia Commons / CC BY-SA 2.0, license linked below article

Starbucks is on an anti-union rampage following the return of former CEO Howard Schultz who claims it's being 'assaulted by the threat of unionization', reports John McGrath

Multi-billionaire Howard Schultz returned as the CEO of Starbucks on Monday, a company he helped build into the largest coffee house franchise in the world with over 33,000 stores. Schultz, a long-time union buster, will be paying himself a $1 salary and re-joins the company after a tumultuous few months that saw the company lose its first branch to a unionisation vote on 9 December 2021 in Buffalo, New York. 13 other stores have voted to form a union to date since - 3 on Thursday alone - and organising petitions have been filed in roughly 200 more outlets. What started in Buffalo is spreading across the country and Schultz’s predecessor, Kevin Johnson, was given an abrupt, early retirement as a result.

At a Starbucks staff town hall event on Monday, Shultz described himself to the hundreds of employees in attendance as being not  “anti-union” but rather “pro-Starbucks”. The topic of unions, he acknowledged to the young crowd, was “a little sensitive, because I’ve been coached a bit.” Schultz, who is personally worth $4.3 billion and presides over a company valued at roughly $53 billion, complained to the workers, “We can’t ignore what is happening in the country as it relates to companies throughout the country being assaulted, in many ways, by the threat of unionization.”

An hour after the meeting, Starbucks fired Laila Dalton, a 19-year-old barista who had been working at an Arizona Starbucks for 3 years and who had been leading a union drive in her store. 

Starbucks has been harassing union leaders over the year and firing them on the pretext of bad behaviour. The company sacked seven workers in Memphis in February when the location announced it would be forming a union. Last Friday, Angela Krempa of Buffalo, New York was fired for ticky tack infractions including wearing a union pin and showing up 17 minutes late for a 5:30am shift even though in this case she followed company protocol by reaching out to her co-workers beforehand. More to the point, Angela was an outspoken member of Starbucks Workers United, and a liability to the company in that she was effective in the role.

Unfortunately, dozens of activists have been purged by the company in recent weeks as management has become desperate in what appears to be a losing battle anyway. Technically it is illegal in the US for a company to fire a worker for organising a union, and while many workers have filed grievances with the National Labor Relations Board (NLRB), the agency is understaffed and Starbucks hires expensive lawyers who can delay hearings and outcomes in endless cycles of litigation. 

Laila Dalton’s firing on Monday, also Shultz’s first day, was particularly tone-setting. She has been harassed by management for months and the NLRB itself had filed a formal complaint four weeks ago. Despite her young age, Dalton is a charismatic organiser who gained notoriety in her advocacy for the fast food industry to unionise en masse. In an interview in March she summarised,

“Well, my goal is to unionize the entire food industry. Starbucks is a big corporation, but there are so many other fast-food places. I want the whole food industry to know that it’s possible to unionize. I want people to learn what a union is and know that they have support if they want one.”

Clearly Starbucks feels threatened and is lashing out. But the fact that more branches are voting to form a union proves the intimidation tactics are not working, and perhaps might be backfiring. Workers have been able to generate excitement and support on social media and the company has suffered a public relations hit as a result. Howard Schultz was brought in to fix things and return the company to simpler times.

Shareholders vs Stakeholders

Monday was a particularly busy first day back for Shultz as he announced that the company would scrap its practice of stock buybacks immediately and would “invest more profit into our people and our stores - the only way to create long-term value for all stakeholders”.

Buying back stock is fantastic for shareholders and investors as stock prices rise at the expense of sharing the surplus with the workers who create it. Starbucks spent $10 billion on buybacks in 2019 before the practice was temporarily halted during the pandemic. The company announced that it would resume the practice last October, and last quarter, the company spent $3.5 billion in buybacks. Time will tell if the money spent on buybacks will be redistributed in the form of higher wages and increased benefits. Scepticism is warranted as the company announced on Monday that it would be investing in NFT production - so prioritising virtual illusions may prove to be more important than boosting worker pay after all.

Even if pay does increase, workers shouldn’t have to rely on the generosity of billionaire bosses to be paid what they deserve. In fact, Howard Shultz, his $1 salary and his promise to invest in his workforce is a ruse. The workers have the company on the back foot and there is more power in forming a union then settling for better benefits and a pay raise without one. The tight labour market takes some of the risk out of losing a job or leaving a job to find alternate employment. Fighting for a union, and the pay raise, dignity, job benefits and protections is easier to do when there are plenty of jobs without these provisions to choose from. Why quit when you can change conditions? 

As Amazon Labor Union leader Chris Smalls, who was recently successful in forming the first-ever union in Amazon, put it in a recent CNBC interview this week,

“The revolution is here. We’re not quitting anymore. We’re organising.”

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