Current Events > Starbucks to boost worker pay and benefits due to Trump tax cuts

(+) Yeah! (+)

https://www.cnbc.com/2018/01/24/starbucks-to-boost-pay-and-benefits-after-us-lowers-corporate-taxes.html

Starbucks Chairman and former CEO Howard SchultzStarbucks to give bonuses and raises after new tax law
5 Hours Ago | 00:37
Starbucks will use some of the savings from the new U.S. corporate tax cuts to give domestic employees pay raises, company stock and expanded benefits with a combined worth of more than $250 million, the company said on Wednesday.

With the announcement, the world's biggest coffee chain joins companies like Walmart, Apple, Comcast, and American Airlines in sharing their tax savings with employees.

Starbucks is known for giving its workers, which it calls "partners," more generous pay and benefits than other mass-market restaurants and retailers.

"Investing in our partners has long been our strategy, and due to the recent changes in U.S. tax law, we are able to accelerate some significant partner investments," Chief Executive Kevin Johnson said in a letter to employees.

Starbucks declined to say how much it expected its tax bill to drop under the new plan, and said executives would give details on its earnings call on Thursday.

Credit Suisse analyst Jason West recently estimated that Starbucks' global tax rate could fall to about 24-25 percent from around 33 percent, which would drive roughly $425 million in annual tax savings.

Seattle-based Starbucks said it will give hourly and salaried employees, who received pay raises in January, a second wage increase in April.

It is giving additional stock grants to eligible employees on April 16. Coffee shop workers will receive a grant of at least $500 and store managers will receive $2,000 grants.

Starting July 1, all employees will accrue paid time off to care for themselves and loved ones when they are ill. Starbucks said the national benefit was designed to match or exceed the benefits some partners were already due under existing city or state-mandated paid sick leave laws.

Starbucks also expanded its parental leave policy for cafe workers, giving non-birth parents up to six weeks of paid leave when welcoming a new child.

In addition to Disney committing to the same thing, as seen in this other topic:

https://www.gamefaqs.com/boards/400-current-events/76237274

So. MUCH. WINNING.
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M_Live posted...

My job isn't doing anything like this.

Get a new job.
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It's a trend that will continue as people start changing employers. Companies will need to up their stakes if they want to retain talent.
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M_Live posted...

DragonGirlYuki posted...

M_Live posted...

My job isn't doing anything like this.

Get a new job.

Life's not that simple lol

Sounds like you don't have valuable skills.
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the interesting thing about sbux response is they were opposed to the cuts and swore not to pass their benefits to shareholders

i am inclined to believe them
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I can see Walmart bringing up the wage but slashing hours

Lulz.

Likely a 30 cent wage increase anyway.
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Darkman124 posted...

the interesting thing about sbux response is they were opposed to the cuts and swore not to pass their benefits to shareholders

i am inclined to believe them

lol Starbucks is a known haven for dogwhistlers and virtue signalers. ultimately they're doing it because of the tax cuts. otherwise they'd have done this long ago.
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Or they are trying to maintain their current workforce. Turnover is high in the industry and it is expensive to retrain new hires.
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M_Live posted...

It seems like the places doing this are businesses like Starbucks looking to maintain a PR image. Most people aren't going to leave their jobs to go cashier at Starbucks or work in Disney Land.

Or maybe tax cuts really enable companies to invest in themselves and expand.
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DragonGirlYuki posted...

Or they are trying to maintain their current workforce. Turnover is high in the industry and it is expensive to retrain new hires.

That's good. If they want to reduce turnover, they need to make it more desirable to work there. Especially as other companies are upping their compensation/benefits in response to the Trump tax cuts. Those companies will attract more employees, so if Starbucks and other companies don't do the same thing they'll be screwed.
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FLUFFYGERM posted...

lol Starbucks is a known haven for dogwhistlers and virtue signalers. ultimately they're doing it because of the tax cuts. otherwise they'd have done this long ago.

you misunderstand

http://money.cnn.com/2017/11/09/investing/howard-schultz-tax-cuts-starbucks/index.html

their former CEO was against the cut and they were always saying they'd pass nearly all the benefits from any cut to their workers

where disney's passdown is 13%, starbucks' passdown is a much higher fraction of the total cut
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Darkman124 posted...

FLUFFYGERM posted...

lol Starbucks is a known haven for dogwhistlers and virtue signalers. ultimately they're doing it because of the tax cuts. otherwise they'd have done this long ago.

you misunderstand

http://money.cnn.com/2017/11/09/investing/howard-schultz-tax-cuts-starbucks/index.html

their former CEO was against the cut and they were always saying they'd pass nearly all the benefits from any cut to their workers

where disney's passdown is 13%, starbucks' passdown is a much higher fraction of the total cut

Oh I see now. Yeah, that's good! But it's kind of stupid for the CEO to be against the cut and then pass down the benefits. Because then the employees will see that they got some nice benefit/pay increases and wonder why their CEO was against the cut in the first place lmao.

Anyway, Starbucks CEO has been known to be pretty left leaning, no? He'd probably disagree with any tax cuts, any time, out of principle.
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When youre done inhaling Trump, could give me credit for even showing you this story. https://www.gamefaqs.com/boards/400-current-events/76237332

CruelBuffalo posted...

When youre done inhaling Trump, could give me credit for even showing you this story. https://www.gamefaqs.com/boards/400-current-events/76237332

lol'd
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FLUFFYGERM posted...

But it's kind of stupid for the CEO to be against the cut and then pass down the benefits. Because then the employees will see that they got some nice benefit/pay increases and wonder why their CEO was against the cut in the first place lmao.

naw, i think the workers can understand the thought process. the world is bigger than their specific employer who doesn't keep government tax cuts for themselves.
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Darkman124 posted...

FLUFFYGERM posted...

But it's kind of stupid for the CEO to be against the cut and then pass down the benefits. Because then the employees will see that they got some nice benefit/pay increases and wonder why their CEO was against the cut in the first place lmao.

naw, i think the workers can understand the thought process. the world is bigger than their specific employer who doesn't keep government tax cuts for themselves.

Nah I think the workers with brains will realize that tax cuts enable more revenue, which enables more investment.
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FLUFFYGERM posted...

Nah I think the workers with brains will realize that tax cuts enable more revenue, which enables more investment.

not all investments are in workers. most will be in capital expenditures.
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Darkman124 posted...

FLUFFYGERM posted...

Nah I think the workers with brains will realize that tax cuts enable more revenue, which enables more investment.

not all investments are in workers. most will be in capital expenditures.

which will enable more need for workers and which means more management opportunities and more profit for investment into benefits

a virtuous cycle

and the portion that is investment into workers (more pay, benefits, tuition reimbursement, etc) will certainly be welcomed
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Spooking posted...

FLUFFYGERM posted...

Anyway, Starbucks CEO has been known to be pretty left leaning, no? He'd probably disagree with any tax cuts, any time, out of principle.

Howard Schultz knows who drinks at Starbucks, so it's easy to virtue signal to keep them coming in.

lmao
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FLUFFYGERM posted...

which will enable more need for workers

or, depending on the items purchased, less. which also improves the bottom line and returns value to shareholders.

a race to the bottom.
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Guess all those right wing boycotts because they had "holiday cups" didn't pan out. lolol
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Investment is a good thing. If it enables workers to become more productive it enables them to receive higher wages since their work is more valuable.
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Darkman124 posted...

FLUFFYGERM posted...

which will enable more need for workers

or, depending on the items purchased, less. which also improves the bottom line and returns value to shareholders.

a race to the bottom.

I don't think anyone besides socialists thinks returning value to shareholders is a bad thing or a "race to the bottom." Like seriously, what's wrong with that? If the shareholders aren't seeing value in the stock, they won't buy it. And the company won't be able to raise funds for growth.

Keep in mind that shareholders are often employees. Especially in the case of companies like Verizon that are giving their employees bonuses in the form of stock grants due to the tax cuts. The line between worker and shareholder is not always black and white, and you absolutely NEED shareholders in order to have a healthy and thriving economy.
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FLUFFYGERM posted...

Keep in mind that shareholders are often employees.

generally speaking, the vast majority of shares are held by institutional investors, not employees. your theory is based on a false assumption.
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Darkman124 posted...

FLUFFYGERM posted...

Keep in mind that shareholders are often employees.

generally speaking, the vast majority of shares are held by institutional investors, not employees. your theory is based on a false assumption.

No, my theory is based on 1) The fact that shareholders are necessary 2) shareholders can be employees and vice versa 3) shareholders getting more value is not a bad thing at all
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i feel like last week or something you posted a couple of companies that did this then ppl found out they were proceeding with huge layoffs

maybe it wasn't you

Is it any shock that liberal/progressive companies are doing that?
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FrenchCrunch posted...

i feel like last week or something you posted a couple of companies that did this then ppl found out they were proceeding with huge layoffs

maybe it wasn't you

When Walmart announced they were doing this, I posted the topic. Then it came out that they were closing their Sams Club branch. But the people who point to that as some kind of evidence of a conspiracy are clowning around, because Sams Club has been doing poorly for a long time and there's no reason why Walmart should keep them open rather than focus on their main book of business.

The fact that a ton of major companies are expanding pay/benefits and crediting the tax cuts is evidence that the tax cuts are actually working and that Sams Club being closed is nothing worth mentioning in this context.
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Darkman124 posted...

FLUFFYGERM posted...

Keep in mind that shareholders are often employees.

generally speaking, the vast majority of shares are held by institutional investors, not employees. your theory is based on a false assumption.

And who owns institutional investors? Oh right employees of other companies who are counting on the returns to fund their retirement.
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FrenchCrunch posted...

i feel like last week or something you posted a couple of companies that did this then ppl found out they were proceeding with huge layoffs

maybe it wasn't you

There have been quite a few stories like that. "Everyone is getting $1000 (convenient they are all just random $1000 bonuses.... ).... *under their breath* also we are laying off 35000 people"
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DragonGirlYuki posted...

And who owns institutional investors? Oh right employees of other companies who are counting on the returns to fund their retirement.

that's an extremely naive belief

the top 1% holds 38% of all stock equities; the top 20% owns 92% of all stock equities
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so what's wrong with shareholders darkman

you are taking for granted that it is bad if shareholders get an increase in value
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Darkman124 posted...

DragonGirlYuki posted...

And who owns institutional investors? Oh right employees of other companies who are counting on the returns to fund their retirement.

that's an extremely naive belief

the top 1% holds 38% of all stock equities; the top 20% owns 92% of all stock equities

So are you saying average workers SHOULDN'T be allowed to invest for their retirement just because rich people invest?
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DragonGirlYuki posted...

Darkman124 posted...

DragonGirlYuki posted...

And who owns institutional investors? Oh right employees of other companies who are counting on the returns to fund their retirement.

that's an extremely naive belief

the top 1% holds 38% of all stock equities; the top 20% owns 92% of all stock equities

So are you saying average workers SHOULDN'T be allowed to invest for their retirement just because rich people invest?

that's not what he's saying at all. how in the world did you derive that from his post?
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DragonGirlYuki posted...

Darkman124 posted...

DragonGirlYuki posted...

And who owns institutional investors? Oh right employees of other companies who are counting on the returns to fund their retirement.

that's an extremely naive belief

the top 1% holds 38% of all stock equities; the top 20% owns 92% of all stock equities

So are you saying average workers SHOULDN'T be allowed to invest for their retirement just because rich people invest?

damn darkman getting spanked
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FLUFFYGERM posted...

so what's wrong with shareholders darkman

you are taking for granted that it is bad if shareholders get an increase in value

shareholders being prioritized for gains is the fundamental reason why salaries have not increased despite corporate profits rising nonstop over the last four decades. instead, over that period, it's dividends that have risen.

the reason workers are getting thrown a bone right now is they have the rare ability to strip shareholders of those gains by voting for democrats, much as shareholders have stripped them of any gains by demanding lower costs and higher productivity from the board

you can't service both shareholders and workers unless you're being subsidized, which is fundamentally what the tax cut is. companies are wise to split it so as not to lose it entirely, but they may anyway.
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*checks GE stock*

darkman getting double spanked
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FLUFFYGERM posted...

*checks GE stock*

darkman getting double spanked

my buy at 15.88 is still up a good bit

you seem mad though
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Starbucks is well-known for treating there employees well. Which is for the best since they work pretty damn hard compared to other fast food type jobs.
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Darkman124 posted...

FLUFFYGERM posted...

so what's wrong with shareholders darkman

you are taking for granted that it is bad if shareholders get an increase in value

shareholders being prioritized for gains is the fundamental reason why salaries have not increased despite corporate profits rising nonstop over the last four decades

the reason workers are getting thrown a bone right now is they have the rare ability to strip shareholders of those gains by voting for democrats, much as shareholders have stripped them of any gains by demanding lower costs and higher productivity from the board

salaries have not increased? well, depends. blue collar compensation has been skyrocketing.

https://www.economist.com/news/united-states/21731332-weaker-dollar-and-energy-boom-are-pushing-up-pay-blue-collar-wages-are-surging-can-it

Millennial wages are increasing at nearly double the national average rate

http://www.benefitspro.com/2017/10/17/millennials-hourly-wages-increasing-at-double-the

Maybe wages aren't increasing not because of shareholders...but because the labor market is saturated. Most jobs aren't that difficult and you can find someone to replace you. Hence people have no leverage with which to negotiate.

I'm not convinced it's "shareholders or wages." Seems like a false dichotomy to me.
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Darkman124 posted...

FLUFFYGERM posted...

*checks GE stock*

darkman getting double spanked

my buy at 15.88 is still up a good bit

you seem mad though

nah lol i'm just trolling :P
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I worked in Starbucks. A Starbucks raise is like 2%. Youll wind up making more just by quitting and starting at a higher initial wage. I had an amazing coworker who was only making like 11.50/hr after 6 years with the company, and that was only because she was a shift manager.
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FLUFFYGERM posted...

DragonGirlYuki posted...

Darkman124 posted...

DragonGirlYuki posted...

And who owns institutional investors? Oh right employees of other companies who are counting on the returns to fund their retirement.

that's an extremely naive belief

the top 1% holds 38% of all stock equities; the top 20% owns 92% of all stock equities

So are you saying average workers SHOULDN'T be allowed to invest for their retirement just because rich people invest?

damn darkman getting spanked

.... she completely failed to understand his point and you think he got spanked? in the words of Proudclad:

lmao
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FLUFFYGERM posted...

salaries have not increased? well, depends. blue collar compensation has been skyrocketing.

https://www.economist.com/news/united-states/21731332-weaker-dollar-and-energy-boom-are-pushing-up-pay-blue-collar-wages-are-surging-can-it

over two years. from the same article:

IF THERE was a defining economic problem for America as it recovered from the financial crisis, it was stagnant wages.

That same definining problem goes back to the 1980s. We're talking about hugely different timeframes.

Fundamentally: labor compensation is a cost. Shareholders want to see costs minimized, so that more capital is available to be returned to them. There is fundamental competition for a company's assets between labor and shareholders, and for 40 years, shareholders have won. That trend is unlikely to change meaningfully; any gains workers see is a small fraction of the total gain to the company.

Before you change the subject to "Isn't it good that they see any gains at all?" remember that you asked why helping shareholders was bad. The reason is "It's bad for labor."

Maybe you don't care about labor's outcome in all of this, or think that the scraps they're getting now will be enough to keep them in line--that's your prerogative, but I'd rather not have to fund a police state to keep them from eating me.
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Giant_Aspirin posted...

FLUFFYGERM posted...

DragonGirlYuki posted...

Darkman124 posted...

DragonGirlYuki posted...

And who owns institutional investors? Oh right employees of other companies who are counting on the returns to fund their retirement.

that's an extremely naive belief

the top 1% holds 38% of all stock equities; the top 20% owns 92% of all stock equities

So are you saying average workers SHOULDN'T be allowed to invest for their retirement just because rich people invest?

damn darkman getting spanked

.... she completely failed to understand his point and you think he got spanked? in the words of Proudclad:

lmao

damn fluffy getting spanked

Darkman124 posted...

over two years. from the same article:

IF THERE was a defining economic problem for America as it recovered from the financial crisis, it was stagnant wages.

That same definining problem goes back to the 1980s. We're talking about hugely different timeframes.

Fundamentally: labor compensation is a cost. Shareholders want to see costs minimized, so that more capital is available to be returned to them. There is fundamental competition for a company's assets between labor and shareholders, and for 40 years, shareholders have won. That trend is unlikely to change meaningfully; any gains workers see is a small fraction of the total gain to the company.

Stagnant wages since the Great Recession is understandable, considering everything got boned hard by that. I think something interesting that happened since the 1980s is that more women got in the labor market. So all of a sudden you have the other half of the population looking for work. Then everyone got degrees. So the labor market is very saturated, and people are easily replaced.

Shareholders drive growth, sometimes more than the laborers since in some cases the laborers wouldn't even be able to have a job without the investors. If all the investors sell their holdings, you're fucked unless you have very solid revenue and don't need to raise more capital.

I'd agree, as someone who owns stock, that workers should see more of the profit though. And we're taking the appropriate steps to get there - tax cuts so that our corporate tax rate is competitive.

We should cut it even more.
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