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    Starbucks Commits to Closing the U.S. Gender Pay Gap

  • The java chain joined to create a shared set of Pay Equity Principles.

    Starbucks
    Starbucks continues to invest in employees.

    In 2018, Starbucks announced it reached 100 percent pay equity for men and women and people of all races performing the same work. It took the java chain nearly 10 years to pull it off. That’s still lightning quick compared to how long experts believe it will take the country to do so. The American Association of University Women has stated before it could be 100 years, even longer globally, before the gap closes. Their earlier data showed that, in the U.S., women were paid 80 cents for every dollar paid to men. “At the rate of change between 1960 and 2016, women are expected to reach pay equity with men in 2059. But even that slow progress has stalled in recent years,” the AAUW said. “If change continues at the slower rate seen since 2001, women will not reach pay equity with men until 2119.”

    At its annual shareholders meeting in March, Starbucks said it maintained pay equity for another year and verified that its China and Canada stores—two of Starbucks’ largest global markets for corporate units—also fulfilled the company’s commitment to achieve and maintain gender equity in pay.

    READ MORE: Starbucks plans $100 million on startups.

    Fittingly, Starbucks took another step Tuesday—Equal Pay Day—joining 25 other U.S. employers in the Employers for Pay Equity Consortium to share a set of “Pay Equity Principles” intended to help eliminate the gender pay gap.

    “The Pay Equity Principles we signed onto today—equal footing, transparency and accountability—were created not only to help us but also other organizations and businesses seeking to eradicate the pay gap,” Starbucks CEO Kevin Johnson said in a statement. “While the signatories to the Pay Equity Principles represent different industries facing different challenges to achieving pay equity, we all agree that by working together we can accelerate the elimination of the national pay gap.”

    The Billie Jean King Leadership Initiative, National Partnership for Women & Families, American Association of University Women, and the American Civil Liberties Union also signed on in support of the letter.

    Many of the companies previously inked the White House Equal Pay Pledge in 2016, committing to conduct annual company-wide gender pay analysis; review hiring and promotion processes; to reduce unconscious bias and structural barriers; and embed equal pay efforts with broader enterprise-wide equity initiatives.

    “The companies are where rubber meets the road,” added Elisa Van Dam, who works with Employers for Pay Equity as liaison with Simmons School of Business at Simmons University in Boston, in a statement. “Legislation is important in bringing attention to the issue, but companies do the work. This shows internally and externally that they are committed and putting the resources in.”

    Starbucks revealed its Pay Equity Principles last year. As for how Starbucks got there, it created a collection of tools and best practices for preventing disparities. Included: a calculator to objectively determine target starting pay ranges based on experience. Raises and bonuses are also statistically analyzed before being finalized to ensure systemic bias doesn’t play a role, Starbucks said. The company doesn’t ask candidates for a salary history to avoid importing pay inequities. Additionally, Starbucks provides candidates the pay range of any given role when asked.

    One of the biggest announcements last year arrived in January, when companies nationwide started to get a hold on just how much tax reform capital they would generate.

    Starbucks’ corporate tax cuts totaled more than $250 million and Starbucks said it would invest it back into the workforce—a move affecting more than 150,000 employees.

    This included a new partner and family sick time benefit for all U.S. employees that allowed employees to accrue paid sick time based on hours worked and then use them if they or a family member needs care (one hour for every 30 hours worked).

    Starbucks also announced its second wage increase for all U.S. hourly and salaried partners in addition to the annual increases already granted in fiscal 2017. In April 2018, all eligible U.S. hourly and salaried employees received the boost. This included an investment of about $120 million in wage increases that was allocated based on regional cost of living and laws that vary state by state.

    Lastly, Starbucks announced an additional 2018 stock grant with a one-year vest. On April 16 2018, the company provided the additional grant for all eligible full-time, part-time, hourly, and salaried U.S. employees across all Starbucks’ stores, plants, and support center who were active as of January 1. All retail employees received at least a $500 grant. Store managers received a $2,000 grant, and plant and support center employees (non-retail) grants will vary depending on annualized salary or level. This investment alone, Starbucks pointed out, was valued at more than $100 million

    At its March meeting this year, the company provided some additional employee initiative updates, including:

    • Veterans and Military Spouses: With 22,000 hires to date, Starbucks is on track to well exceed its goal of 25,000 hires by 2025.
    • Opportunity Youth: Starbucks is on track to meet its goal of hiring 100,000 Opportunity Youth—defined by the U.S. Department of Labor as 16-24 year-olds not in school or in the labor force—by 2020, with 75,000 hired so far.
    • Partners in Pursuit of a Higher Education: The Starbucks College Achievement Plan—a model for access to higher education for employees in partnership with Arizona State University—has more than 12,000 scholars as of this year and more than 2,300 graduates since its launch in 2014. Through the Starbucks College Achievement Plan, partners earn a bachelor’s degree with tuition costs covered, without a further commitment to Starbucks. The program’s goal is 25,000 graduates by 2025.

    Starbucks also became one of the largest retailers in the country to offer an employee benefit aimed at helping ease child care burdens.

    Employees pay $1 an hour for in-home backup child or adult care or $5 per day per child for in-center childcare. (After the 10 backup care days, or for other services offered through Care.com such as pet sitting and housekeeping, partners pay the full cost.)

    Additionally, employees can access resources to help with senior care planning. They can connect at no cost with a Senior Care Adviser for professional guidance and a customized plan for senior care, from housing alternatives to legal concerns.

    Below is the full draft of the pay equity letter, unveiled Tuesday. It’s signed by Accenture, Adobe, AirBnB, BCG, Caesars Entertainment, Care.com, Chobani, Cisco, Deloitte, Expedia Group, Gap Inc., Go Daddy, Here, IKEA, L’Oreal, Lyft, Navient, PepsiCo, Starbucks, Stella McCartney, and VMware.

    While many agree on the idea of equal pay, the hard work is putting it into practice.

    For over 50 years in the United States, our laws have mandated Equal Pay. Although enforcement of the Equal Pay Act and civil rights laws have helped narrow the wage gap over time, there is still more work to do. Women in the U.S. are still paid only 80 cents for every dollar paid to men in the workforce; the disparity for women of color is even larger. At the current rate of progress, the wage gap will not be closed until 2106. Addressing the pay disparities that remain and the systemic forces that perpetuate them is critical for everyone.

    We, the undersigned employers, believe that business can play a critical role in eliminating the national gender pay gap. Our organizations employ millions of Americans across multiple industries. Together, we have leveraged our collective experiences to create a shared set of Principles to Pay Equity. While every business has a different approach, our goal is to make the work behind eliminating the pay gap actionable and accessible to companies of all sizes.

    Principles to Pay Equity

    • 1. Equal Footing: From the start and throughout a career. One of the most important things to get right is starting pay, which greatly impacts pay as an employee advances throughout their career. Compensation should be based on a candidate or employee’s role, skills, abilities and experience, not their gender, race or any other protected classes.
    • 2. Transparency. Achieving and sustaining pay equity is an imperfect process. We commit to sharing insights and learnings from our work to achieve pay equity. All employees are encouraged to openly ask and discuss wages without fear of retaliation
    • 3. Accountability. We will hold ourselves accountable through practices such as conducting an annual company-wide gender pay analysis across occupations, reviewing hiring and promotion processes to reduce unconscious bias and structural barriers, and embedding equal pay efforts into broader enterprise-wide equity initiatives.

    We invite others to join us in recognizing the importance of this issue. Visit employersforpayequity.com to see how we are bringing these principles to life.