Starbucks announced Wednesday a series of historic investments in wages and benefits, including raising its minimum wage to $15 per hour by next summer after committing to do so in December 2020.
Effective late January 2022, employees with two or more years of service could receive up to a 5 percent raise, and workers with five or more years under their belt could receive up to a 10 percent raise. By the summer, average pay for all U.S. hourly partners will rise to nearly $17 per hour—up from $14 per hour—with barista hourly rates ranging from $15 to $23 per hour based on market and tenure.
“As Starbucks celebrates our 50th anniversary we are reminded that our heritage is based on the simple concept that our green apron partners are the heartbeat of Starbucks and that success is best when it’s shared,” CEO Kevin Johnson said in a statement. “Today, we are announcing another historic investment in our partners, knowing that when we take care of our partners, they take care of our customers, and all stakeholders benefit."
"This is how we continue to build a great and enduring company," he continued. "One that is committed to the ideal that doing good for one another—and for society—is good for business over the long-term.”
The news comes almost a year after Starbucks revealed that it was giving all employees at least 10 percent raises, including baristas, supervisors, and café attendants and announced intentions to raise starting pay to at least $15 in the next few years.
The brand said the funding will result in roughly $1 billion in incremental investments in annual wages and benefits over the last two years.
Starbucks' moves is yet another display of quick-service concepts jockeying for position amid the labor shortage. In May, Chipotle said it was raising wages to an average of $15 per hour, lifting the range to $11 to $18. McDonald's made a similar move, increasing pay to an average of $13 per hour and up even further to an average of $15 per hour by 2024.
In an effort to attract more talent, Starbucks has added recruiting specialists across all of its U.S. markets and extended its $200 referral bonus. And when those new employees come in, the brand wants to ensure they're being trained appropriately. This means a redesign of the chain's "Barista Basics" guide for employees—including added training time for all roles and practice shifts—and expanding its 40 training stores that are dedicated entirely to training employees.
Additionally, the coffee chain is testing a "shifts app" that helps employees work at times that fit their personal needs. And to meet the increasing pace of beverage innovation, the brand is looking to improve its behind-the-bar equipment by testing a cold beverage station in select stores. The company said a team of support workers and data analysts and a Store Manager Council are working to shape each of these changes.
To ensure ongoing improvements, Starbucks formed a team of more than 20 employees that will use the brand's 20,000-square-foot innovation lab, the Tryer Center, to focus on behind-the-bar layout redesigns, innovative store equipment and technology, and evolving operational roles in stores.
“Our founder Howard Schultz believed in the dignity of the human experience, in building a successful company, and that our success should always be shared,” North America President Rossann William said in a statement. “These new investments show the continued commitment we all have to creating the best opportunities and experience for our partners.”