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Are Starbucks and Howard Schultz really not to blame for the chain's unionization?

Working Lunch: The CEO is quick to shift responsibility to societal trends. So why is the brand making so many operational changes?

The public’s perception of four-alarm issues for the restaurant industry are likely colored by the way those matters are covered in the media. This week’s Working Lunch podcast analyzes how two front-burner topics, tipping and unionization, were addressed in recent standout reports.

Co-hosts Joe Kefauver and Franklin Coley had praise for the way a Wall Street Journal story broke down the implications for a lay audience of a proposed Internal Revenue Service rule change. The piece looked at the fearsome agency’s suggestion that servers’ tipped income be tabulated and reported automatically to Uncle Sam via POS systems and other sorts of restaurant technology.  

That arrangement takes restaurateurs out of the reporting chain, but it promises to increase the payroll assessments levied on both tipped employees and their employers. The whole point of the process change would be to calculate servers’ taxable income more accurately.

Kefauver and Coley, the government-affairs experts who co-run the Orlando-based consulting firm Align Public Strategies, questioned the need for such an approach when consumers are already shifting from leaving cash tips to charging gratuities on a credit card. Since operators are already tabulating the amounts left on cards, won’t the cashless trend accomplish the IRS’ aim without any additional gyrations?

The co-hosts agreed with the Journal reporter’s contention that the IRS proposal could be a solution in search of a problem.

The episode also analyzes a recent on-air Howard Schultz interview in which the Starbucks CEO blames the continuing unionization of his charge on societal changes, not anything the coffee giant has or has not done. They noted that Schultz was adamant in his argument that the chain was more of a passive victim of the times than the cause of the unionization drive.

Kefauver and Coley expressed some sympathy with Schultz’s view, but didn’t buy his argument in its entirety. They also observed that Schultz clearly relished having a stage to pontificate and fend off blame.

“If I was on Starbucks’ public relations team, I’d probably have a drinking problem” because of Schultz’s love of the spotlight, said Kefauver.

Download this and every episode of Working Lunch from wherever you get your podcasts.

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