Starbuck has announced that they will increase the wages of baristas to $15 per hour by the end of summer of 2022. It is further said that minimum wage would be $15 per hour and it can go up to $23 per hour. Currently, the average hourly wages of employees are $14 per hour.

Labor Shortage Crisis in U.S.

Restaurants, bars and cafes are finding it difficult to hire and retain staff to cater the rebounding demand. Companies like Domino’s Pizza, McDonald’s and Popeye’s have all faced labor related challenges during the 3^rd quarter of 2021. It is much easier for employees to find a better job at a higher salary. Keeping in view this trend Starbucks has also planned to increase the minimum wages.

New Wage Plan

This increase in wage rates will assist in attracting workforce. Starbucks have also come up with an employee retention strategy. The baristas working at the coffee chain for at least two years will get up to 5% raise till January 2022. Similarly, employees working with Starbucks for at least 5 years will receive a wage hike of up to 10%. In an effort to attract more workers, Starbucks has also hired recruitment specialists across U.S. and are paying $200 referral bonus for each new hire. The company is already planning for another pay raise during summer 2022 which may bring its average wage to $17 per hour.

Efforts to Unionize

Starbucks workers in Buffalo, New York are putting in effort to unionize a handful of Starbuck cafes. Employees are working to form a union to address issues like chronic understaffing. However, Starbucks denied that this wage increase is not due to these unionized efforts. According to the café chain’s statement “We respect our partners’ right to organize but believe that they would not find it necessary given our pro-partner environment”.

The U.S. job market is facing the crisis of labor shortage across all industries. In wake of this turmoil companies are increasing the wages to attract new workers and giving pay hikes to existing employees to retain them.

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