One of the most interesting union campaigns in recent years is happening right now in Buffalo, New York. Workers in three Starbucks outlets started a union organizing effort over their concerns about seniority pay, scheduling, staffing levels, and safety and health during COVID (plus, at one store an infestation of bees was left festering for months). Earlier this month, the National Labor Relations Board mailed ballots to the workers in these stores, who will have four weeks to vote on whether to unionize with Workers United, an affiliate of the Service Employees International Union. If they do, these stores would be the first unionized locations among the ubiquitous chains thousands of U.S. locations.
Starbuckss response to the union campaign has been mostly predictable: They closed at least one location (finally clearing out the bees) and converted it into a training center; theyve also held countless meetings to push pro-company and anti-union propaganda. The coffee giants efforts have on occasion veered into the comic and bizarre: In October, corporate executives descended on Buffalo stores, sweeping floors while asking about workers concerns, and a few weeks ago, founder and ex-CEO Howard Schultz touched down to speak directly to Buffalo workers. Schultzs messaging was, at minimum, idiosyncratic: In his talk, he jarringly shared a story about the Holocaust, and he later penned a Splenda-filled missive to the team in which the word love appears five times.
The companys overall reaction, though, is utterly unoriginal. Its the same knee-jerk opposition to unions that weve seen since the 1800s, with a few just-as-hoary variations. Instead of beating people up, Starbucks uses other well-worn approaches, from gaslighting (Everythings great) to good cop/bad cop (We love you! But we closed the storefor other reasonsafter you asked for a union.) American employers anti-union playbook is so standardized that one union in another industry has even come up with a bingo board of typical management talking points during an organizing drive.
Starbucks is great at inventing fantastical coffee concoctionsand creakingly orthodox in its opposition to its workers desire for a union. If the company wanted to demonstrate real innovation and imagination, it would realize that a different approachrecognizing and working with the unioncould be a powerful competitive advantage and actually benefit the business.
Instead, the companys response shows a fundamental misunderstanding of why workers want unions. Schultzs letter, for example, basically says: Were a good company. We arent a sweatshop or a meat processing plant or a coal mine. We even exceed whats legally required and provide some genuinely beneficial above-and-beyond offerings for our workers and for communities. And because were better than some employers out there, you dont need a union.
But without a union contract, these above-and-beyond offerings can be eliminated in a heartbeat. Theyre acts of benevolence, not rights. Without a union contract, workers have no job security, protection from arbitrary firing, right to raises or to adequate staffing levels. They dont have the transparency and processes that union contracts provide, which can help reduce race and gender inequities and provide LGBTQ workers with protection.
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More broadly, the decency of an employer doesnt obviate the need for a union. Even a nice monarchy is still an unsettling prospect. Unions are a way for workers to have a say on the job, to be part of an institution that provides them with a formal, legally enforceable voice to counteract the power imbalance with management. When there are new developments in the workplace and in the world, from bees to a pandemic, unions give workers a way to have a more impactful voice than that provided by a corporate suggestion box.
Todays workers increasingly understand that they need an institutionalized voice on the job. A recent MIT survey found that almost half of non-union workers would join a union if given the chance, and a Gallup poll in August found that over two-thirds of respondents approve of labor unionsthe highest level in half a century. Opposition to unions is out of step with mainstream America.
Starbuckss response to the Buffalo union campaign completely fails to reflect an understanding of this shifting zeitgeist. The company fails to grasp that a unionized Starbucks could be a tremendous asset to business.
Starbucks is great at inventing fantastical coffee concoctionsand creakingly orthodox in its opposition to its workers desire for a union.
When public opinion is so strongly pro-union, a unionized workforce at Starbucks would offer a meaningful competitive advantage. Imagine the marketing a unionized Starbucks could do. Imagine the potential long-term brand loyalty from younger customers, who in surveys are even more supportive of unions than their elders (more than three-quarters approve of unions). And conversely, consider the business downsides of being viewed as a union-buster. Many customers care about corporate ethics these days. And Starbucks isnt a monopoly like Amazon; when it comes to coffee, customers can easily vote with their feet, since there are plenty of other places to get a cup of joe.
A unionized Starbucks could bring other business advantages, including increased retention and employee engagement. The companys yearly turnover rate, around 65 percent, is better than the industry average. But thats still a tremendous avoidable churn, and expensive too: A single turnover can cost the company as much as a third of a workers annual wages or even more. Also, even if 65 percent turnover is better than some other companies, it may look very different and less acceptable to workers and customers. Imagine the boon to Starbucks if its turnover decreased to single digits. Imagine if people could make a lifelong career there. Unionized UPS has been driving circles around non-unionized FedEx during the pandemic, as its employees, who earn decent pay and benefits, havent been quitting. With a stable workforce, UPS has ensured continued on-time deliveries and beat earnings expectations, while FedExs profit margins are falling. In these unpredictable times, with COVID, climate crises, and who knows what else lying ahead, reliable and committed workers are a meaningful business asset.
In addition, unions can be a valuable resource for employers. Professional union staff often have extensive expertise in workplace safety and health. And in many unionized workplaces, joint labor-management committees collaborate to solve workplace problems. In the health care industry, such partnerships have led to improved service and reduced costs through in-the-weeds joint projects focusing on reducing wait times or improving staff responsiveness to patient calls. This approach makes sense, whether the focus is on healing patients or selling coffee. After all, whos more knowledgeable about current operational shortcomings: some guy parachuted in from McKinsey or a person whos on the front lines every day?
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Traditionalists may ask, but what about the bottom line? What about shareholders? They could rightly add that not all shareholders are fat cats; some are pension funds that fuel worker retirements. But unionization can increase a companys bottom line, in all the ways described above. And lets remember, unions have zero interest in their companies failing. (Note that the workers organizing in Buffalo havent called for a boycott.) True, unionization could lead to a different division of profits, but it has the potential to increase the pie overall.
Beyond that, the interests of unionized workers and shareholders may well be more aligned than they realize: Both often care more about a companys health over the long haul than the CEOs and high-level executives who often are incentivized to focus on short-term quarterly share price fluctuations. Neither workers nor shareholders are well served by an excessive CEO-to-median-worker pay ratio (Starbuckss was 1,211-to-1 for fiscal year 2020, and shareholders rejected a $50 million retention plan for the CEO earlier this year.) Including union or worker representatives on corporate boards could also help to combat the short-termism that CEOs are inclined to pursue.
Finally, whats the purpose of a company in the end? Starbucks has long positioned itself as a progressive business, and indeed, CEO Kevin Johnson was one of the 181 corporate leaders who in 2019 signed a much-heralded Business Roundtable statement about the purpose of a corporation. That statement rejected the notion that corporations have obligations only to shareholders, and it recognized that a company should be responsible to multiple stakeholders, including customers, communities, suppliers, and yes, employees. While theres scant evidence of the companies thus far living up to these principles, the statement reveals their understanding that the broader society is moving toward a new vision of what a company should be.
Starbucks, like any company whose workers are unionizing, could take a genuinely innovative path. It has the opportunity to become a visionary leader; its executives could use their imagination to move toward a different corporate future. Imagine a Starbucks in 2030 or 2035 thats known nationally as the unionized coffee chain, with the most stable workforce among all quick-serve restaurants, amazing service, amazing coffee, beloved by a generation of customers, shareholders, and workers.
A sweet-talking but hard-line anti-union campaign is neither innovative nor new. Its yesterday. Its boring. Its old. But its not the only choice.
