Starbucks Workers Battle CEO Schultz

Perennial Starbucks CEO Howard Schultz has done everything he can to beat down store workers who want to unionize. He has been partly successful, but it appears his employees are about to overwhelm him. One of the main strategies he has to change to the company no longer has much of a foundation.

More than 100 unionized Starbucks locations face employee walkouts on Red Cup Day when customers come to stores to get their red cups. For some reason, this is a popular day for customers, which means the locations should have brisk traffic.

Starbucks Workers United is the architect of the plan. They have faced a wall of resistance from Schultz as they try to unionize more stores. According to CNBC, “The union said the strike is meant to call attention to the company’s alleged union busting and refusal to negotiate contracts fairly.“ Starbucks management says it disagrees.

Schultz knows a union means he loses some control over the ability to set wages and benefits. Workers at its stores make a minimum of $17 an hour, which keeps them closer to the poverty line than most retail workers. As inflation increases, the pay situation is even worse.

The union and Schultz understand that strikers outside Starbucks stores, particularly during the holidays, would drive sympathy for workers and push customers away. Starbucks has posted strong earnings under Schultz. Labor problems could erode that if they spread widely.

Unionization has a way of working, particularly at companies that pay poorly. If workers get an even modest increase in pay, it can have a substantial effect on whether they can afford their extremely modest cost of living.

If the Red Cup Day strike works, the union’s effort almost certainly will spread quickly.

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