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The union is planning to ask for higher wages and benefits as well. While organizing baristas have mentioned the low pay gains for more senior staff and other benefits issues, contract negotiations at its Elmwood location in Buffalo, New York, have focused on "just cause" firing, stronger health and safety policies, and allowing customers to tip with credit cards. "Starbucks has made the job of being a barista so much more challenging that even if they 'solve the wage and benefit issue,' I don't think that's necessarily going to stop or slow down the unionization push," said Nick Kalm, who has advised other companies on how to deal with unionizing workers, strikes and lockouts as founder and president of Reputation Partners. There's also the risk that Starbucks hikes worker pay, but the initiative doesn't stave off unionization efforts. Higher benefits could dissuade baristas from organizing, but Wall Street is worried that strategy may come at too high a cost.Ĭiti Research analyst Jon Tower wrote in a note on April 11 that either wage hikes or growing momentum behind the unionization efforts would make him more bearish on the stock.
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Labor experts say that's technically true, but Starbucks can still ask the union if those baristas want the enhanced benefits. store leaders last week, Schultz said the company was weighing improved benefits for all its workers, but that federal labor law precludes the chain from giving higher pay or making other changes to the terms of employment for unionized workers. Starbucks did not respond to a request for comment at the time, but Schultz appeared to confirm the strategy on his first day back on the job when he announced that Starbucks would suspend all stock buybacks to invest back into the company's people and cafes. In late March, Starbucks Workers United warned Schultz could leverage those improved benefits in an attempt to curb the union's campaign. In October, when Kevin Johnson was CEO, the company announced two wage hikes for all of its baristas that would take effect this year and bring its average wage up to $17 per hour.