Starbucks Is Losing the Union War

According to the National Labor Relations Board, employees at two Starbucks near Cleveland filed to create unions. Although the number of Starbucks unionized stores is small, it is growing steadily. (These companies are planning the biggest mass layoffs this year.)

That presents a unique challenge for the new CEO Laxman Narasimhan as to whether he will maintain the union-busting tactics of his predecessor, Howard Schultz. Narasimhan faces a backlash from his workers and eventually may face challenges from his customers.

Union busting is not a good image for Starbucks. Its employees are known for their friendly demeanors. However, some have to be upset by the low hourly wages they are paid, particularly during a period of inflation. It might even be argued that they cannot shop at Starbucks themselves.

As the union movement expands and Starbucks opposes it, the press and customers will question why the coffee chain does not treat its workers better, like mining and car companies did decades ago. Union busting is a tactic that largely ended in the middle of the past century.

When will Narasimhan face a customer buycott? Odds are he will not have to wait long.

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