The irony with Starbucks’ socially responsible image is simply that it is a myth. Its baristas have long struggled to get a decent pay, healthcare plans, and reasonable employment terms. With its stores heavily understaffed – there are seldom more than five baristas serving at a time – workers are always exposed to unsafe working environments. The constant flow of customers requires them to handle hot drinks at unreasonable speeds, and often to work at irregular hours. Still, they are given little or no healthcare, nor are they getting paid enough to afford any. According to a report by the Wall Street Journal, as of 2006, only 42% of Starbucks employees were insured, compared to Wal-Mart’s 47%.
What’s worse is that all baristas are hired on a part-time basis, with no guaranteed hours. One could work double shifts one week and half as much the next. For workers on a typical weekly budget, planning out expenses on such a schedule simply will not work.
In May 2004, baristas from a number of Manhattan shops formed a workers union and sought help to urge Starbucks to raise their wages, which at that time was at poverty level. Starbucks relented, but only barely, and not without putting up a fight. Union organizers were fired just as the unionization effort was spreading to Chicago and other areas. Rules against union organizing were implemented, and workers wearing Industrial Workers of the World (IWW) pins were sent home with no pay. Starbucks also teamed up with Akin Gump, a law firm known for its anti-union stance, to contest its employees’ rights to vote in the National Labor Relations Board (NLRB) union elections. It was only after the IWW and the NLRB intervened that these aggressive policies were invalidated and the relieved employees reinstated.
In New York City, the union managed to raise the hourly wages by $1 in some stores, and a mere 10 to 25 cents in others. As of November 2006, baristas are still earning around $7 per hour – hardly enough to pay for rent, let alone bills and healthcare premiums. By contrast, former Starbucks CEO Howard Schultz is reportedly worth about $1 billion.
The fair trade battle
In Tanzania, one of Starbucks’ major coffee importers, coffee farmers work long hours to meet demands from corporations like Starbucks – for a pitiful wage of $15 yearly. Elsewhere, coffee farmers are suffering much the same fate, or worse, depleting their farms and losing their livelihoods. It seems that baristas are not the only victims of Starbucks injustice.
From the start, the coffee industry has always flourished at the expense of Third World farmers. According to Marginal Revolution, while it earns about $18 billion annually, the bulk of which goes to Starbucks and its contemporaries, the people who actually grow, tend, and harvest the coffee are perpetually at the losing end. In recent years, coffee from East Timor has lost market value by 35%, and the wages of Mexican coffee farmers have diminished by 50%. On the other hand, Starbucks is enjoying a 40% profit increase.
How fair is Fair Trade Coffee?
As market leader, Starbucks has exercised unfair control over the world’s coffee bean trade, trampling smaller indigenous markets in the process. According to a 2006 report by the BBC, the company asked the National Coffee Association (NCA) to stop the trademark efforts for Harar, Sidamo, and Yirgacheffe, all native coffee beans from Ethiopia. According to Oxfam, the move would deny Ethiopian coffee farmers as much as $88 million in earnings every year. Talks between Ethiopian Prime Minister Meles Zenawi and Starbucks CEO Jim Donald in November 2006 failed to resolve the problem.
Starbucks’ answer to this is Fair Trade coffee – coffee made from beans grown by Third World farmers. The plan involves purchasing one million pounds of Third World-produced coffee at competitive prices, an attempt to raise the living standards of coffee farmers.
It seems that the move is hardly altruistic. For starters, Starbucks sells Fair Trade coffee at about the same price as other gourmet coffees. It makes up a tiny fraction of the chain’s total coffee import. The project will hardly make a dent in the company’s overall revenues, and while this is hardly the measure of goodwill, it is clear that Starbucks can give much more than it offers.