Low Wages! Massive Starbucks Strike Breaks Out Across the United States

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Starbucks Workers Strike on Red Cup Day

According to media reports, over 100 Starbucks employees across the United States went on strike at their stores on November 17th. Baristas organized the strike to pressure the company to increase wages and improve staffing levels, seeking better compensation and benefits.

The strike occurred on Starbucks' traditional "Red Cup Day," an annual promotional event when stores give away reusable holiday-themed cups to customers. This day is typically one of Starbucks' busiest days of the year, and this 25-year tradition has been considered a key driver for fourth-quarter sales growth.

According to reports, this marks the largest strike by Starbucks workers to date. A shift supervisor at a Starbucks store in Montclair, New Jersey, stated that the strike was organized because Starbucks refused to engage in good-faith negotiations with the union, leading over 100 store employees to choose "Red Cup Day" for their strike action.

Starbucks Global Presence and Market Position

Starbucks maintains a strong global presence, with the most dense store distribution among coffee chain brands worldwide. Its footprint extends to nearly every affluent town, and the company has consistently focused on commercially sourcing and roasting high-quality Arabica coffee from around the world. With over 32,000 stores across 82 markets, Starbucks stands as the world's premier specialty coffee chain brand.

Starbucks Coffee Company was founded in 1971 and is headquartered in Seattle, Washington. In the United States alone, it operates nearly 9,000 company-owned stores. China serves as Starbucks' second-largest global market. Since entering China in 1999, the company has been committed to developing as a distinctive enterprise. Today, Starbucks has opened over 6,000 stores in more than 230 cities across mainland China, employing over 60,000 Starbucks partners (employees).

Financial Performance and Challenges

According to Starbucks' financial data for the fourth quarter and full year of fiscal 2022 (as of October 2nd), revenue from July to September increased by 3.3%, reaching $8.414 billion in total revenue, marking a historical high for total sales. However, net profit was $878 million, a 50.2% decrease year-over-year. The financial report also shows that Starbucks' total revenue for fiscal 2022 was $32.25 billion, an 11% increase year-over-year, while net profit was $3.28 billion, a 21.8% decrease year-over-year.

In China, Starbucks' second-largest market, same-store sales decreased by 16%, better than analysts' previous forecast of a 20% decline, considering that same-store sales in China had dropped by 44% in the previous quarter. Net revenue recovered from a 38% decline in the previous quarter to a 9% decline, suggesting that Starbucks' overall performance is showing some signs of recovery.

Wage Disputes and Labor Relations

Starbucks has consistently claimed that its employee compensation and benefits exceed industry standards. Regarding the decline in fourth-quarter net profit, Starbucks explained that it was due to increased employee wages, new training for workers, and rising supply chain, food, and material costs. However, some employees feel that Starbucks' wages are too low and working hours too long. The company's commitment to providing higher wages and benefits to non-unionized stores has also angered many workers.

According to reports, Bai Wenxi, chief economist at IPG, told Time Finance: "The employment situation in the United States has been favorable in recent years, with unemployment rates repeatedly reaching historical lows, which has also driven increases in average compensation, legal minimum wages, and hourly wages. This aligns with Starbucks' description in its financial reports about rising personnel costs, as the company heavily relies on part-time workers.

However, the magnitude of Starbucks' wage increases may not keep pace with adjustments in average wages and hourly rates, triggering strike issues among Starbucks workers due to low wages. This doesn't actually contradict Starbucks' statement in its financial reports about rising employee wages."

Image source: Internet

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