Starbucks is spending $120 million to address baristas' complaints and raise wages in a move 'accelerated' by the new tax law

  • Starbucks employees are getting raises in April, marking the company’s second round of wage increases in 2018.
  • The CEO said the raises and new benefits were “accelerated” because of the new tax law.
  • Starbucks is also offering a new round of benefits, including one that addresses inequality between corporate and in-store workers.

Starbucks is making some changes after baristas’ complaints.

On Wednesday, CEO Kevin Johnson announced that workers were set to receive two raises in 2018 as well as a new wave of benefits.

In April, hourly and salaried partnered employees will receive their second raise of the year, following their January annual wage increase. Raises will be based on regional factors, such as the cost of living and local minimum wage.

Starbucks will invest $US120 million in raising pay, a move Johnson said in a letter to employees was “accelerated” by the new tax law.

Many baristas have previously complained of being underpaid, despite Starbucks’ reputation for offering impressive benefits.


“My team wants to be able to afford rent and groceries,” one employee told Business Insider last year. “If you had asked partners if they could have the option for higher pay or the college achievement program, somewhere around 90% of all partners would have asked for increased pay.”

“I don’t know how many times I’ve heard that we’re the most important part of the company,” another employee said. “If we’re the most important part of the company and our connection is that important, [they shouldn’t be] paying as little as they can get away with paying.”

“It’s a poverty wage,” a California Starbucks shift supervisor, Jaime Prater, wrote of his income in a blog post published last week. “Living off of this income isn’t just implausible, it’s impossible. It’s not livable under any circumstances.”

The company is also addressing complaints that some Starbucks policies favoured corporate employees while ignoring baristas and other in-store workers.

Starbucks has expanded its paternal-leave policy to allow all non-birth parents to receive up to six weeks of paid leave after the birth or adoption of a child. Last year, the company received backlash for it unequal paternity-leave policies for corporate and in-store workers.

Additionally, starting in July, all full-time and part-time workers will be able to accrue paid sick time that can be used if they need to care for sick family members in addition to when employees themselves are sick.

Starbucks has invested $US800 million in employee compensation and benefits over the past four years, according to the company. On Wednesday, Starbucks reported that an independent benchmarking study performed by the professional-services firm Aon found that the benefits of Starbucks employees working at least 20 hours a week ranked above those of any other retailer examined.

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.