4 things Howard Schultz revealed to the Senate about Starbucks

He countered his critics' barrage of incriminating facts with a few truth bombs of his own.
The average pay of a Starbucks worker is $17.50 an hour. Or is it $27? / Photo: Shutterstock

The senators who grilled Howard Schultz on Wednesday had clearly done their homework, citing fact after fact to justify their characterization of the former Starbucks chief as a union-buster. But Schultz had come prepared with ample ammunition of his own, refuting the assertions with tidbits that few outside the coffee chain might know. Here’s a sampling.

Starbucks’ true compensation levels

The current average wage of a Starbucks barista is $17.50, Schultz revealed. He noted that the rate is higher than the minimum wages of all 50 states.

And that’s just the cash part of their compensation, the former CEO added. With benefits included, “the value approaches $27 an hour,” Schultz said.

He also disclosed that Starbucks had spent $1.4 billion over the last year on “employee-facing benefits.”

What about managers?

“All in, the average manager’s salary is about $80,000,” Schultz said. He also noted that 65% of managers were formerly baristas.

And the results?

“Employee retention at Starbucks is twice the industry average,” said Schultz. “Let me repeat that: Employee retention at Starbucks is twice the industry average.”

Read more about Schultz's Senate hearing here.

So what has Schultz been doing?

About 95% of his one year as interim CEO was focused on improving operations, including in-store efficiencies, he revealed. A reset was necessary because the company’s policies and values were in danger of being watered down by Wall Street, Schultz added. He speculated that investors were less than pleased when his first move as acting chief was halting stock buybacks.

Schultz surrendered his CEO duties last week to a hand-picked successor, Laxman Narasimhan, but remains on Starbucks’ board.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Trend or fad? These restaurant currents could go either way

Reality Check: A number of ripples were evident in the business during the first half of the year. The question is, do they have staying power?


Starbucks' value offer is a bad idea

The Bottom Line: It’s not entirely clear that price is the reason Starbucks is losing traffic. If it isn’t, the company’s new value offer could backfire.


Struggling I Heart Mac and Cheese franchisees push back against their franchisor

Operators say most of them aren't making money and want a break on their royalties. But they also complain about receiving expired cheese from closed stores. "Don't send us moldy product."


More from our partners