Starbucks Takes Another Blow

Howard Schultz, the once and often CEO of Starbucks, has dodged an effort by Senator Bernie Sanders to appear and justify the company’s labor practices, particularly toward its lower-paid employees. Schultz admits that he believes the union movement of his store workers is bad for the company and has resisted it. The extent of that resistance may end up in the courts, via a complaint by the National Labor Relations Board. And Schultz may end up at a Senate hearing. He will find it harder and harder to dodge. (Click here for 25 brands customers are abandoning.)

The New York Times, writing about Sanders, reported, “The senator has set a Wednesday vote to compel Howard Schultz, the billionaire Starbucks chief executive, to testify in front of the Senate Health, Education, Labor and Pensions Committee.” Further angering Sanders could have consequences that argue Schultz should appear.

Starbucks does have a labor problem, driven by management. Hourly employees do have some good benefits, but hourly pay starts at $15. That leaves full-time workers earning barely as much as a living wage.

In the meantime, Schultz has a net worth of $2.2 billion, according to Forbes. Starbucks is monstrously profitable. Last year, it brought in $32 billion in revenue and had a net income of $3.3 billion. Several states are considering a $20 minimum wage in three or four years. There is no reason Starbucks cannot offer that now, even over the protests of its shareholders (some of whom would think the decision is doing the right thing).

Schultz gets to go to the Senate and is bound to be beaten up when he gets back.

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