Coffee chain Starbucks to hike US wages

Starbucks, facing growing competition for workers in the US, plans to raise employee compensation by up to 15% later this year.

Staff in its US company-operated stores will get a bump in base pay of at least 5% on October 3, Starbucks said in a statement yesterday.

The coffee chain also is doubling the size of its annual stock award to employees who have been with the company for two years.

Combined, the changes will bring the compensation increase to as much as 15%.

“The range of increase will be determined by geographic and market factors and is intended to ensure Starbucks remains a retail employer of choice in all the markets where we operate,” chief executive Howard Schultz said in the statement.

Starbucks faces a tightening labour market in much of the US, as well as minimum wage increases in some states and cities.

That has pushed restaurants and retailers, including Wal-Mart Stores, McDonald’s and Target Corporation to boost pay in a bid to retain hourly workers.

Starbucks said last year that employees who work at least 20 hours a week were also eligible to have full tuition covered for online classes at Arizona State University.

In addition to the compensation changes, Seattle-based Starbucks also is loosening its dress code, Mr Schultz said.

“We’ve heard your requests for more freedom when it comes to bringing your ‘whole self’ to work.

"Our latest dress code changes are designed to work well with the green apron while expanding your options, providing more room for self-expression, and allowing you to choose from items that may already be part of your everyday wardrobe,” he said.

Details on that policy change will be released by the end of this month.

Starbucks had about 150,000 employees at company-operated stores in the US.

The company was accused by employees through an online petition of cutting US staffing hours after Starbucks introduced a software for ordering and paying from mobile devices.

Mr Schultz also said the company would address scheduling concerns.

“You have my personal commitment we will work with every partner (employee) to ensure you have the hours you need,” he said. Shares have slipped 6% this year. n Bloomberg and Reuters