WILL STARBUCKS EVER BE UNIONIZED?

 

                             …Howard Schultz, the founder and CEO of Starbucks

 

The Starbuck’s founder has been working to keep that from happening

 

In early 2021, Howard Schultz, the billionaire founder of Starbucks, stood alone beside the auditorium stage at the company’s global headquarters. The room was packed with 200 of his top executives, all waiting for him to speak.

But first Schultz wanted them to hear from their employees across the country. The lights dimmed and their recorded voices filled the room.

• “My last three shifts I’ve cried,” said one barista.
• “We’re stressed out at work. We’re stressed out at home,” said another.
• “I was told by a customer that I was a disgrace to my heritage,” said a third as Schultz walked onto the stage and settled into a chair.

The 69-year-old CEO had always seen himself as the good guy of American capitalism, believing that his own wealth and Starbucks’s rise to become one of the most ubiquitous brands on the planet was a direct outgrowth of the company’s concern for its workers and their well-being.

Only now all of that was being challenged. Across America, workers who had labored through a once-in-a-century pandemic were concluding that they deserved better and were quitting or demanding more from their bosses, or in the case of some Starbucks workers, unionizing. An organizing effort that began in Buffalo in August 2021 with a handful of cafes had, by the time Schultz took the stage in early July, spread to more than 225 of Starbucks’s 9,000 U.S. stores, sparking hopes of a revived labor movement.

 

 On picket lines outside the stores, pro-union workers were slamming Schultz as a greedy, 

out-of-touch billionaire with a $130 million yacht. The National Labor Relations Board was

accusing Starbucks in court filings of carrying out a “virulent, widespread and well-

orchestrated” anti-union campaign that relied on firings, threat and surveillance. Democratic 

senators who once praised Schultz as a “pathbreaking” and humane leader were 

now castigating him for undermining his workers’ rights.

To Schultz, the unionization drive felt like an attack on his life’s work. In previous speeches to his employees, he had cast the union as “a group trying to take our people,” and “outside force that’s trying desperately to disrupt our company” and “an adversary that’s threatening the very essence of what [we] believe to be true.”

The stress of it all was weighing on Schultz, who had been back on the job for three months and had told Starbucks’s board that he didn’t have the energy to stay for more than a year. That gave him 12 months to convince his nonunion workers that his version of benevolent capitalism could offer them more than any union. In his mind, he had 12 months to save his company.

“Why is this so personal to me?” he asked the executives in the room. Schultz stared down at the ground, his arms resting on his knees and his shoulders bent.

“I know what it has taken to build this place. I know what’s at stake right now,” he continued, struggling to get the words out. “And we have to show … to show up in a different way.” The room fell silent. Schultz steadied himself.

“And let me be honest with you,” he told them. “Time is not on our side.”

 From the beginning, Schultz said he was building a different kind of company, unlike anything that had ever existed for low-wage service workers. In the early 1990s, he offered health insurance and stock options to his employees, even the part-timers, and insisted they be called “partners” to show that they had a stake in the company’s success. He worried that his employees were carrying too much student loan debt, so Schultz teamed with Arizona State University to offer free online college to all of his employees.

He told his baristas that they weren’t merely selling drinks, they were creating a sense of belonging for customers in an increasingly atomized world. In interviews, he cast Starbucks’s mission in spiritual terms.

“We’re not in the business of filling bellies,” he told Scott Pelley on “60 Minutes” in 2006. “We’re in the business of filling souls.”

If Schultz’s evangelizing about “achieving the fragile balance between profit and benevolence” sometimes came off as paternalistic, it was because Schultz had seen the way his father, a truck and taxi driver in New York City, had been treated by his employers. They had broken him, Schultz believed, turning him into an abusive man who was unable to provide for his family.  Schultz told his employees that he wanted them to find meaning in their jobs and that he was offering them a pathway to the American Dream that had been denied to his dad.

His vision was also shaped by the 1990s when he came of age as a CEO and everything in America seemed possible. Profits were rising, wages were growing, and globalization seemed to promise an era of endless prosperity. In those days, a Starbucks cafe with its fancy Italian drinks was something new and sophisticated, a sign that your city or town had arrived.

Starting in 1992, Starbucks recorded 190 consecutive months of comparable store sales growth. The company went from 165 U.S. locations to more than 15,000 scattered across the world.  Every year brought a new market: Japan, Malaysia, Qatar, Lebanon, Chile and China.

A nationwide labor shortage had given the baristas some real negotiating power.

Kevin Johnson, a former Microsoft executive who succeeded Schultz as CEO in 2018, never visited Buffalo, but Schultz, who held no official position with the company, made two trips to the city in the fall of 2021. On his first, store managers told him of broken equipment that the company never seemed to fix and flooding in their cafes: “things that I had never heard before,” Schultz recalled in an interview.

A month later Schultz returned to beg a ballroom full of baristas to give Starbucks a chance to fix the problems without a union. His plea failed, and in December 2021 the first Buffalo stores voted to be represented by Starbucks Workers United. By early April, Schultz was back as CEO, explaining to tens of thousands of his employees watching online and in person at Starbucks’s headquarters his understanding of the problem. It wasn’t that Starbucks was losing money or that demand for its beverages was waning, but that corporate executives hadn’t listened to their employees. They hadn’t understood the strain the pandemic was putting on their lives.

Almost immediately Schultz hit the road to meet with baristas, shift supervisors and store managers across the country. The sessions typically began with an admission from Schultz that the company had failed them and a plea that they speak frankly.

“I need to hear everything,” Schultz began a session in San Jose, “as much as you can share.”

Baristas told him that they weren’t making enough money to pay their bills. They complained about equipment that had been broken for weeks, understaffed stores, insufficient training and supply chain snarls.

Some of the problems seemed bigger than Starbucks, rooted in a country that had taken a dark turn during the pandemic, Schultz said. He visited Nashville, Phoenix and Long Beach, Calif. Workers routinely told him that their customers had grown angrier, more aggressive and demanding. He traveled to New York, Chicago, St. Louis and Denver. He heard more and more from baristas about frightening encounters with homeless people and drug addicts in their store’s bathrooms

“I didn’t know it existed,” he said. “I didn’t know our people didn’t feel safe.”

All the while the union was growing.  In Schultz’s first month back,  65 stores petitioned for votes. Union officials, who had hoped that Schultz might reluctantly make peace with their movement, were baffled by his increasingly hostile tone. “I’ve never met a businessman like him,” said Richard Bensinger, a longtime organizer who was working with the Starbucks baristas. “He hates unions more than he loves money.”

Schultz has struggled to see his unionizing employees as real workers with actual grievances. After the Starbucks Reserve Roastery in Seattle, a sprawling store that serves freshly prepared food and alcohol, voted 38-27 to unionize, Schultz alleged in an interview that 20 employees had gone to work there just to vote for the union.

Union leaders at the store said they had no idea what he was talking about. “Maybe there were 20 people that quit, but literally nothing else he said is true,” said Melissa Slabaugh, a nine-year Starbucks veteran who led the roastery organizing effort.

To Schultz, unions existed to protect workers from bad companies, like the ones who had abused his father. “That’s why unions were created,” he said in an interview. A union had no place at a company that cared about its workers like Starbucks, Schultz believed. It would pit employees against their bosses, turning partners into adversaries.

It was “anathema,” he said, to the culture of shared success that he had sought to build over the course of decades..

After much effort, things finally got apparently better.

To Schultz, the proof of his and Starbucks’s goodness was in its past actions. “We have a 51-year history of building this company the right way,” he said. It was in the numbers.

 

In early September, 2022, Starbucks’s U.S. operation recorded one of its strongest weeks in company history. Employee retention numbers were finally returning to pre-Covid levels, and the number of stores filing for union election was down from a high of 71 in March to only 10 in September.

 

For the first time in his return as CEO, Schultz was sure he was winning. 

 

Ms. Whisler, the barista from Schultz’s neighborhood store, had skipped all the demonstrations. “I’d been so burnt out at work lately,” she said.

Schultz’s resistance to the unionization push had left her and many of her co-workers doubtful they’d ever get a contract. She wasn’t even sure the union would survive. “I’d love a stable, long-term union, but I don’t know if it’s super likely,” she said. “For me, the be-all and end-all is that people feel supported and can earn a living wage.”

 

She went to sleep that day, a little before 9 p.m. so she’d be able to wake up at 3:30 a.m. for her morning shift.

 

A few miles away Schultz was also ending his day.

 

Before he turned in for the night, he typed out a message to his staff. “Over my four decades with Starbucks, I’ve been so fortunate to experience so many defining moments for the company,” he wrote.

.“It was a return to the soul of the company,” Schultz said. “A seminal day.”

 

It remains to be seen if what Schultz said will be true.  There is still a desire for many employees to have a representative union at their back.

 

Copyright G. Ater 2022