Starbucks Increasing Wages and Benefits for 150K Employees

[IndustrialJustice]

Grumble grumble rich corporations grumble...

lol

[IndustrialJustice]

http://www.foxbusiness.com/markets/2018/01/24/starbucks-to-increase-wages-improve-benefits-for-150k-employees.html
Tax Reform is being cited as a direct cause.

Grumble grumble rich corporations grumble...

Increased profit margins since 2010 are cited as the cause for the recent oh-so benevolence of the Starbucks CEO. The tax cut, once more, affected the timing of an announcement rather than the contents.

If you consider the amount of fattening profit raked in by corporations like Starbucks, it is unspeakably shameful the working conditions and meager pay granted to the employees. They should not be commended if they decide that, due to a massive tax break, they pay an average employee $10/hr instead of $9/hr. It is sickening if we are expected to applaud a multi-billion dollar industry for "trickling down" table scraps onto its workforce.

This is stupid, because even an increase of $1 an hour for 150K employees multiplies out to a very large increase of pay, both for an individual worker and for the company as a whole.

Assuming the average worker puts in about 35 hours a week, to adjust for part time workers, that figure multiplies out to $5.25 billion extra pay a week, and over, let's say 48 paid weeks on average, that comes out to an increase of $252 million a year. For ONE EXTRA DOLLAR per hour. This is before we even consider whatever benefits are being included in this program.

The total revenue of Starbucks last year was $22 billion. If we multiply out what the total wage of Starbucks workers would be at this new $10 price point, it would be about $2.7 billion for the entire payroll, minus the higher level managers and such. Not counting costs for the production of food, raw materials, re-investments back into the company, etc., the total profit for Starbucks was actually a relatively small $2.88 billion... a figure approximately equal to the payroll for these employees. Even increasing the minimum wage to $15 would probably move the company into, at best, a normal profit, basically breaking even for the year.

This also comes out to an extra $1,800 per worker, pre-tax. Not bad, and people in this relatively lower class tax bracket generally don't to pay a huge amount in taxes, anyway. Now, does this have much to do with the tax bill? Maybe not, but it puts the idea of "greedy corporations" into question.

This is stupid, because it assumes that corporations of this size should even be allowed to exist if they can't manage to pay more than $10 an hour for the vast majority of its labor.

10 percent of Amazon employees in some states are on food stamps.

[IndustrialJustice]

Are any companies cutting back in any way besides WalMart? Seems more likely that WalMart is just awful.

Off the top of my head: Carrier, Comcast, AT&T, Wells Fargo, Kimberly-Clark...

[IndustrialJustice]

This is stupid because the solution it implies would lead to a very small amount of companies which would operate in an oligopolistic fashion, since no one would start up or maintain newer corporations.

Or you could follow the actual logic of my argument and dust off the antitrust laws that people like Robert Bork castrated.  

But no, you're right: what we have is an incredibly healthy labor force that is in no way hurtling towards a breaking point. If Amazon can't afford to pay its employees $11 an hour while simultaneously swallowing up the economy, then by God, we can't ask them to fork over a penny more.

[IndustrialJustice]

Well, sure, I'd love to nationalize Starbucks in the abstract and give all of their workers a well-deserved raise tomorrow. Within the confines of capitalism, I'm fine with just smashing it to smithereens.

[IndustrialJustice]

1. I'm not a communist.

2. The "success" of an economic system is relative. For large swathes of people in America, capitalism has failed them and is still failing them. We can probably say this for a larger chunk of the population every year. And we can confidently say it has failed a majority of our country's minority population.

If you're looking for a deeper debate concerning the morality and efficacy behind different structures of economic order, I believe there are boards specifically for that.

[IndustrialJustice]

Hint: I may or may not be humoring you based upon your immediate willingness to call me a communist (after what was some pretty cookie-cutter economic justice rhetoric on my part).

[IndustrialJustice]

Ok.

I just think it's unreasonable to expect a corporation to provide a "great" working environment, yet also to maximize profit. This is why we have laws, and hell, a corporation gets a ton of benefits from the law, like limited liability. So why not make laws protecting workers. I dislike communism because it leads to stagnation, and inefficiency, and when the system collapses its always the friends of the former communist leader who get the spoils of unregulated capitalism. How about we just stick with regulated capitalism?

I love this post so much.