Starbucks to raise average pay up to $17 an hour as it faces a labor shortage

Facing twin pressures of a union challenge and a labor shortage, Starbucks announced Wednesday it is hiking wages for U.S. employees.

All hourly pay workers will make at least $15 an hour and average nearly $17 an hour in summer 2022. Some of the pay increases will start before the summer, the Seattle-based coffee giant said.

Starting in late January 2022, employees with two or more years of service could receive up to a 5% raise and those with five or more years could receive up to a 10% raise, Starbucks said.

Including wage and benefit increases throughout the pandemic, the company estimates the increases total "approximately $1 billion in incremental investments in annual wages and benefits over the last two years."

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Starbucks said barista hourly rates will range based on market and tenure from $15 to $23 per hour across the country in summer.

The wage hike comes as Starbucks fends off a unionization effort in New York. None of its corporate-owned shops in the U.S. are unionized. In August, Starbucks workers from three Buffalo, New York locations petitioned the National Labor Relations Board for a vote on whether to unionize.

The company is seeking to persuade the labor board to require that workers at all 20 Buffalo-area stores take part in the election instead of allowing stores to vote individually, the New York Times reported.

Amazon workers in New York also are trying to unionize. The organizing drives are happening during a moment of reckoning across corporate America as the pandemic and ensuing labor shortage has given employees more leverage to fight for better working conditions and pay.

Workers have staged strikes at Kellogg’s U.S. cereal plants as well as at Deere & Co., Frito-Lay and Nabisco facilities nationwide.

About 4.3 million Americans quit their jobs in August, the Labor Department said last week, the most on records dating back more than two decades.

Many large corporations criticized for underpaying their staff are now upping their offerings in hopes of attracting more workers. That means hourly-wage jobs are being boosted to pay levels never seen before. Walmart and Bank of America are among businesses that announced recent pay hikes.

Starbucks announced that it was investing in training, which is one of the complaints the New York workers have. The company said it is completely redesigning its "Barista Basics" guide and adding training time.

The union organizing campaign, if successful, could upend Starbucks’ labor model. Employees say chronic understaffing has long caused frustration.

Starbucks said Wednesday it has also “invested in forecasting capabilities to improve store staffing” and is testing a “shifts app” to make it easier for employees to work available shifts. Other tests include a “Cold Beverage Station in select stores around the country.”

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Contributing: Associated Press; Paul Davidson, USA TODAY

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This article originally appeared on USA TODAY: Starbucks pay: Barista hourly wage to be average $17 an hour by summer