Starbucks to hike wages for union workers as it thaws relationship with Workers United

A Starbucks logo is seen as members and supporters of Starbucks Workers United protest outside of a Starbucks store in Dupont Circle, Washington, D.C., on Nov. 16, 2023.

Kevin Dietsch | Getty Images

Starbucks workers at unionized cafes will receive the pay hikes that their nonunion coworkers first collected in May 2022, a key step as the coffee giant and the union representing some baristas signaled Tuesday that they are working toward breaking a standoff over bargaining.

The wage increases are a sign of good faith from Starbucks toward Workers United, an affiliate of the Service Employees International Union that has organized more than 300 company-owned Starbucks locations.

The parties jointly announced Tuesday afternoon that they found a “constructive path forward” during mediation discussions last week. The talks were part of litigation over Workers United’s use of Starbucks’ branding, sparked by a post on social media site X from the union’s account in support of Palestinians.

Starbucks and Workers United said they have agreed to start discussions “on a foundational framework” on how to reach collective bargaining agreements for stores. The announcement marks the most noticeable thawing in the two parties’ relationship since the first Starbucks location unionized in December 2021.

If Starbucks follows through on its pledge to hike wages for union cafes, employees who have been with the company between two years and five years will receive either a 5% increase or get paid 5% above the market’s start rate, earning whichever is higher. Workers with more than five years of tenure will get a 7% increase or earn 10% more than the market’s start rate, whichever is higher.

The coffee chain implemented the wage hikes in May 2022 under the leadership of former CEO Howard Schultz, who waged an aggressive campaign against the union and faced backlash from the organization, politicians and customers for the strategy. Current CEO Laxman Narasimhan has been in the role for nearly a year.

Starbucks also said Tuesday that it would provide unionized cafes with credit card tipping, a benefit that has been available in nonunion stores for more than a year.

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