Starbucks Corp., facing a unionization push and combating a historic labor crunch, on Wednesday said it is increasing pay for its U.S. employees to an average of $17 an hour next summer.
The company, which had previously promised to get all of its hourly workers at company stores to $15, said its baristas would be paid at a range of $15 to $23 an hour.
The Seattle-based coffee giant also said it plans to improve training and recruiting and is testing new designs and equipment, including a new cold beverage station, to reduce complexity inside the chain’s cafes.
“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,” CEO Kevin Johnson said in a statement.
Starbucks said employees with two or more years of service could receive raises of up to 5% in late January, while workers with five or more years of service could get up to 10%.
The move follows the company’s promise in December to get all of its workers to $15 within two to three years. On Wednesday, the company said that its baristas would get to that level next summer, with pay ranging based on market and tenure. Average hourly pay is expected to be nearly $17 an hour by that point.
Starbucks said that it has added recruiting specialists in all U.S. markets and is extending a $200 referral bonus to attract new workers.
The company also said that it is increasing training time for all its roles along with practice shifts. And it will expand the number of training stores.
The technology, meanwhile, is also designed to improve the in-store experience. Starbucks said it has invested in better forecasting to improve staffing and is testing an app that would make it easier for employees to work available shifts.
Starbucks said it has a council of store managers working with employees and data analysts who will work on floor design and equipment to improve operations. That also includes the test of the new cold beverage station.
The company also has a 20,000-square-foot lab in Seattle, called the Tryer Lab, that includes store employees who help with layout redesigns, test equipment and operational roles to reduce complexity inside the chain’s stores.
The extensive set of moves come as the chain is combatting a unionization effort in a group of stores in Buffalo, N.Y., and is also dealing with a complex and ongoing worker shortage. That shortage has driven up wages throughout the country.
The group pushing for unionization took some credit for the increase. “We, the Starbucks partners in Buffalo, are glad that our union campaign has already resulted in some improvements across the country,” Michelle Eisen, an 11-year employee and one of the leaders of the effort, said in a statement posted on Starbucks Workers United’s Twitter account.
“Starbucks has had 50 years to implement seniority pay. They chose to do so right before the upcoming union vote. We look forward to making more improvements when we negotiate our contract.”
While the $17 is just an average and not a starting wage, it could set expectations for restaurant workers even higher and push others to follow suit or risk losing employees.
UPDATE: This story has been updated to include a comment from the Starbucks union organizers.
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