Starbucks Boosts Pay and Benefits for Workers


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Wed. January 24th, 2018 - by Geneva Hutcheson

SEATTLE, WA - In response to new U.S. corporate tax rates, which will generate savings for Starbucks, the coffee chain will raise employees’ pay and expand benefits according to CNBC. With this announcement, Starbucks joins Walmart, who, in a similarly altruistic move, introduced paid parental leave and cash bonuses earlier this month.

In practice, these new employee perks will constitute a one-time bonus—in the form of a stock grant, increased wages, and sick and parental leave according to the Chicago Tribune. These perks not only allow company to stand out in a competitive labor market, but also offer some security for employees, as recanting these promises would be a difficult and risky move for the retailer.

Reggie Borges, Manager, Global Corporate Communications, StarbucksStarbucks’ Manager, Global Corporate Communications Reggie Borges spoke on the matter: “Historically, we've shown we're constantly thinking of ways for partners to share in our company's success, from health care to stock grants.”

Referring to its employees as “partners” is indicative of the retailer’s attitude toward its workers; Starbucks has gone so far as to extend sick leave not only to the employee, but also to allow employees to use their sick leave to care for family members suffering from an illness.

Starbucks store

Borges added that the new perks are not a direct result of the tax cuts, but rather that the tax cuts have allowed the company to enact its plans more rapidly.

Kevin Johnson, Chief Executive Officer, StarbucksChief Executive Kevin Johnson wrote in a letter to employees, “Investing in our partners has long been our strategy, and due to the recent changes in U.S. tax law, we are able to accelerate some significant partner investments.”

Though these employee perks are generous, Starbucks is in a more than adequate position to make them. According to Reuters, Credit Suisse Analyst Jason West estimates that the 8-9% decrease in the company’s tax rates will save the company $425 million annually; the new perks will have a combined worth of just over $250 million.

Starbucks