Howard Schultz wanted to know: The American Dream, “is it still alive?” Surrounded by employees—or “partners,” in company parlance—for an “intimate conversation” in the carpeted ballroom of Buffalo’s Hyatt Regency last November, the soft-spoken Starbucks executive clasped his hands. He wanted his baristas to realize their dreams, he said, just as he had. “But no one can do it alone. No one. We have to do it together.”
It was a disjointed speech, even by the standards of union-busting lectures. An ill-considered anecdote about Jews sharing blankets as they were shuttled to concentration camps during World War II—Starbucks apparently endeavors to do the same for its employees—drew the most media attention, but Schultz’s unscripted spiel “from the heart” lurched haphazardly from the impoverished projects of his Brooklyn upbringing to Israel’s Western Wall to the Starbucks boardroom, where, in an entirely allegorical form of democracy, two chairs are kept empty to represent the voices of baristas and customers.
The enthusiastic centrist has been recycling these anecdotes in shareholder meetings and best-selling books for decades. But this occasion was unusual: workers at six Starbucks locations in the Buffalo, New York, area had filed to vote on whether to become the first unionized shops since the 1980s. Schultz was there to remind his baristas that, absent any outside pressure, the company he’d grown from one to tens of thousands of stores had long ago struck the “fragile balance between profit and conscience.” Starbucks had built its brand on giving a historically undervalued workforce something that approximated a solid corporate job. Moreover, its altruism extended beyond the workplace.
“The greatest threat to a post-pandemic world, and to America, is not inflation. Is not unemployment,” the executive said. “It’s mental health. It’s isolation. It’s loneliness . . . And when we’re at our best, what company is going to be a better remedy for [that] isolation and loneliness?” It was a Covid-inflected variation on Schultz’s singular preoccupation: the idea that Starbucks, a global chain of coffeehouses selling pistachio-flavored lattes, is not just a nearly $140 billion brand but a force for social good. Most every executive, particularly those forged by the West Coast’s buoyant self-determination and rewarded by the handsome public offerings of the 1990s, will say this kind of thing. Schultz appears to genuinely believe it.
Rachel Cohen, a twenty-nine-year-old shift supervisor at one of the New York State stores that had filed for a union ballot count, was sitting in that ballroom watching Schultz deliver his address. At some point, she noticed that a handful of suits who’d flown in from Seattle were wiping away tears. “I was watching these corporate people crying,” she said, “and I’m like, how many times have you heard this? How many times are you going to cry?” The Starbucks branding was “engraved” on her as well, but this was all a little bit much. Starbucks’ revenue increased nearly 24 percent to $29 billion last year, but she’d struggled to secure modest raises during her ten years as an employee. She only makes about twenty cents more an hour than new hires. And yet here was the C-suite, getting misty-eyed as Schultz revisited the moment from two decades ago when Starbucks started offering health insurance and “everyone in the company became a partner,” providing a “historical perspective of the company over a fifty-year period doing the right thing.”
Pour Your Heart into It
Cohen came to Starbucks after running through a series of other retail and service gigs. She’d worked at The Christmas Tree Shop and a PetSmart before landing at a Dunkin’ Donuts in her hometown of Buffalo. Liking the frenetic pace of the coffee shop rush, she decided to apply when a job at Starbucks opened less than a mile from where she lived. At that age, she appreciated the free coffee and food; a few years later, she began taking advantage of the health insurance the company offers, benefits Schultz has boasted cost the company more than the coffee it buys from over four hundred thousand farmers around the world.
Howard Schultz believes that Starbucks is not just a nearly $140 billion brand but a force for social good.
Like many corporations, Starbucks offers tiered insurance, but Cohen still noticed colleagues overlooking health issues out of concern for the cost. In 2016, in an attempt to rein in overheads, the company transitioned to a system that offered what is essentially disaster insurance for less than $40 a paycheck alongside comprehensive coverage that could set a family back upwards of $500 a month—a free-market approach that can create untenable situations for employees, especially if they’re making barely above minimum wage. Under the new system, a young, healthy barista seeking an X-ray likely has to pay the cost of a visit in full until she hits her $3,300 deductible. Cohen says that her coworkers often won’t see a doctor because their copays are so high. One recently came into work wearing an old boot; she’d injured her ankle and couldn’t afford care. And in at least one instance at another store, a part-time employee requiring comprehensive coverage reported spending the entirety of her hourly wage on premiums, leaving her with insurance but no take-home pay. Starbucks’ aggressive, self-congratulatory, liberal rhetoric only made things worse. “Giving partners insurance doesn’t mean they’re taken care of,” said Cohen. The prohibitive cost of staying healthy was a driving force behind her store’s unionization campaign.
Shortly after Schultz’s hotel speech, Cohen’s workplace in Amherst, New York, became a focal point in the movement to unionize the coffee giant. Last August, three Starbucks in her area had petitioned the National Labor Relations Board to join Workers United, an affiliate of the massive Service Employees International Union (SEIU). By the time Cohen and I first spoke in February, the number had grown to one hundred—including Cohen’s—in twenty-six states, each a node in a roiling and unexpected campaign. But it took almost a year between the rumblings about insurance coverage in Amherst and a vote certified by the NLRB. Employees feared retaliation against their organizing: “There were rumors that even talking about a union could be a fireable offense,” Cohen said. While firing employees for labor activity is technically against federal law, those fears were not without prescience.
Starbucks has been hostile to unions since Schultz bought the company from its founders in the late 1980s and, according to labor organizers, led an initiative to decertify an existing bargaining unit. “He went ballistic screaming at me, telling me to get out of the plant,” one union representative recently recalled in the New York Times. Subsequent efforts were squashed, most famously in 2004, when a single store attempted to organize with the Industrial Workers of the World. During that campaign, the company pumped a voicemail from Schultz into store sound systems nationwide and allegedly sent letters to employees claiming the IWW advocated overthrowing capitalism, “the system that forms the economic foundation of the U.S.” Three years later, the NLRB charged that Starbucks had violated thirty labor laws, eventually ruling against the company for firing organizers and threatening sympathetic workers’ jobs.
Today, the coffee chain Schultz describes as being committed to “social responsibility” retains—at great expense—at least thirty lawyers from the nation’s preeminent union-busting law firm, Littler Mendelson, to hamper, disrupt, and challenge stores’ unionization drives. That comes in addition to the in-house legal counsel who made $5.3 million last year, when the unionization wave began. Through the fall and winter of 2021, the company sought to delay elections and discourage workers from voting in favor of a union. Well-dressed members of the C-suite, like Rossann Williams, the president of Starbucks North America, were dispatched to stores across the country to do dishes and take out the trash while picking off individual baristas; they warned that organizing with Workers United would disrupt perks like free Spotify subscriptions. Stores that announced their intention to vote were flooded with new hires or abruptly closed for renovations. In Buffalo, executives held captive audience meetings and paid “listening sessions,” where Williams told employees the corporation didn’t think its “partners need unions to speak on their behalf.” As the campaign intensified, workers who’d been vocal about the union were fired or had their hours reduced. In Memphis, a manager quit in protest, saying she’d been asked to falsify complaints against an employee. Shortly after, Starbucks terminated seven pro-union workers in her store for reasons the company claimed were unrelated to the drive.
In Amherst, Cohen saw corporate pick out the more “vulnerable” baristas in her store for these little chats, the newer and younger employees who might not have much history with their colleagues, or who might be more concerned with a music app subscription than out-of-pocket health care costs. When I asked her if she was personally worried about retaliation, she admitted that the possibility of being fired was certainly in the back of her mind. But she was trying not to think about it too much. Plus, she said, she’d been going in every day on her best behavior. She was never late. She smiled constantly and engaged customers. She was “creating the Third Place.”
This Must Be the Place
In a reasonable universe, I might have encountered the idea of the Third Place from Roy Oldenburg, the sociologist who coined the term in the late 1980s to describe environments between home and work—pubs, post offices, public parks—in which chance meetings and informal conversations occur, strengthening social ties. Instead, I first heard the term in a small break room hidden behind posters advertising Blackberry Green Tea Frappuccinos. It was 2006, and I was in my first week of “green apron” training. My shift supervisor had turned on an informational DVD. As the camera panned across grinning businessmen and young mothers fawning over steaming lattes, a voiceover identified Starbucks as the Third Place, a haven for “conversation and a sense of community”—reframing my minimum-wage position as part of a legitimate social phenomenon upon which a healthy community was built. This job wasn’t just about coffee and breakfast sandwiches. My labor was, in the company’s view, integral to society’s well-being. Accordingly, Starbucks required I “inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.”
The coffee chain Schultz describes as being committed to “social responsibility” retains—at great expense—at least thirty lawyers from the nation’s preeminent union-busting law firm, Littler Mendelson.
Schultz has a weakness for sentimental messaging, which often leads him to mortifying corporate stunts. In 2012, in the wake of the recession, the company released a line of ceramic “Indivisible” mugs, the proceeds from which would be donated to “address the U.S. job crisis and help put people back to work.” In reality, its “Create Jobs for USA” initiative was less a philanthropic endeavor than a loan fund for small businesses—and Starbucks customers were providing the capital to get it off the ground. The following year, as Congress was mired in a budget-related deadlock, Schultz came to the “sad and striking realization that the American people have no platform with which to voice their frustration and outrage.” To help solve the problem, Schultz launched a petition, having previously asked Beltway baristas to scrawl “come together” on the coffee cups they handed to customers. Strangely, many baristas forgot to do their part to avoid the Fiscal Cliff. Undeterred, the company partnered with AOL, encouraging consumers to write their “opinions” on Starbucks cups that would be sent, somehow, to lawmakers in Congress.
Such empty displays of corporate responsibility have been tweaked and redeployed. When two black men in Philadelphia were arrested for asking to use a Starbucks bathroom in 2018, the company’s response included a lengthy anti-bias training framed as a “commitment renewed” to the Third Place; when the pandemic ravaged the business, then-CEO Kevin Johnson described, quite bizarrely, voice ordering through Siri as a way of extending the Third Space online. Leaving aside how grim it is to imagine a life solely comprised of shuffling between the office, the apartment, and triple grande, five-pump, non-fat vanilla lattes, there’s something ridiculous about a chain best known for its identical strip-mall outposts appropriating an academic term. Anyway, prior to the pandemic, the company reported 80 percent of its sales were either drive-through or pick-up orders through its proprietary app, giving the lie to the idea that Starbucks baristas provide anything other than steamed milk with trace amounts of caffeine. There’s a reason Oldenberg wrote in a 2001 book that a “popular coffee house chain” made for a poor imitation of a Third Place. He described a company that provided nothing but “institutional ambiance at an intimate level,” the muzak version of what Schultz is so fond of describing as his “transcendent” original visit to a Milan coffee house in 1983.
But the whole routine makes sense considering Schultz began what he would doubtlessly call his “coffee journey” not as a barista or a roaster but as a marketing manager whose idea to bring coffee house culture to the United States was rebuffed by the original owners of a small café in Seattle’s Pike Place Market. Schultz eventually bought them out with help from luminary investors like Bill Gates. He then oversaw a campaign that was equal parts aggressive expansion and canny branding, which is certainly one interpretation of the American Dream.
In 1991, Starbucks had just over one hundred stores. Seven years later, it owned more than fifteen times that. Along the way, workers became “partners,” customers “guests,” and drink sizes were incorrectly labeled with Italian words the CEO probably guessed provincial coffee drinkers in the United States wouldn’t understand. Schultz’s creativity begins with his sense of self and expands outwards: he consistently refers to himself as a “merchant” in one of his memoirs, Onward: How Starbucks Fought for Its Life without Losing Its Soul (2011), a counterintuitive turn of phrase considering the book’s midpoint climax describes a retreat where a group of executives listen to the Beatles and brainstorm how best to reinvent “iconic” brands. Still, none of Starbucks’ branding exercises were taken on as arduously as Schultz’s insistence that his rapidly expanding chain would offer a revolutionary alternative to more extractive service jobs: “It’s not viewed as a professional job in America to work behind a counter,” he told the New York Times in 1994. “We don’t believe that.”
This mission to professionalize the barista class has relied equally on company perks and corporate jargon—the kind of thing an executive might call a business’s “culture” but which employees mostly face as a series of rigid expectations with cute, trademarked names. For a service job to become a real “career,” in Starbucks’ conception of the term, it must include widespread micromanagement and an aggressively detailed employee handbook: every facet of the job is dictated by corporate, allegedly down to the temperature, controlled remotely by Starbucks HQ. In exchange for upholding the Third Place and memorizing the “tasting notes” of an ever-changing menu of seasonal beverages, baristas are provided with diluted versions of corporate white-collar perks. There’s the expensive health insurance, sick leave, and vacation, but also a few stock options—referred to as Bean Stock, naturally—as well as a 401(k) plan to which the company matches 5 percent. Starbucks servers can get parental leave, though it’s half the time granted to corporate workers. Like all benefits, it is dependent on an unpredictable scheduling apparatus. Twice a year, Starbucks audits employees to ensure people receiving its “special blend” of health coverage have worked at least 520 hours over the preceding six months, a dicey proposition when, for instance, your company transitions to using an algorithm designed to keep stores staffed at the bare minimum, as Starbucks did until a backlash—following a 2014 New York Times exposé—led them to improve their scheduling system.
Schultz has a weakness for sentimental messaging, which often leads him to mortifying corporate stunts.
Announced in 2014, Schultz’s most recent campaign for barista liberation allows employees to take free online college courses through Arizona State University, provided they have funded and finished at least half of their credits—and are willing to apply for loans Starbucks will pay back, as long as the employee remains in good standing with both the college and the coffeehouse. The Starbucks College Achievement plan might just, The Atlantic enthused on its cover, “save the middle class.” Through the program’s first five years, three thousand of the company’s over one hundred thirty-five thousand U.S. workers were awarded bachelor’s degrees by ASU. It’s unclear, though, exactly how much money Starbucks is pouring into this program. Schultz, in characteristic fashion, forecasted “millions” would be spent on this “investment,” though ASU offers a scholarship covering 42 percent of tuition, and baristas are required to fill out need-based applications for federal financial aid, slashing the amount of money the company might have to reimburse.
Schultz’s mission to make service work “real” work was inspired by his father, whose story the executive has been rehearsing in the service of his corporatized benevolence since at least 1992. As Schultz told employees in Buffalo last November, “I worked for so many years to build a company that my father never had a chance to work for.” Fred Schultz, a veteran without a high school degree, never made more than $20,000 in his life, according to his son. He held down a series of blue-collar jobs that destroyed his body and kept his family poor. One winter, driving trucks for a company that delivered cloth diapers, Fred fell on the ice, breaking his hip and ankle. His employer promptly fired him, stranding him without health insurance or worker’s compensation. One takeaway from this story is that Fred could have benefited from a warm-hearted businessman who guaranteed sick leave and health insurance, subject to twice-annual audits and fervent allegiance to his trucking brand. Another is that Fred could have benefited from a strong union.
Starbucks’ perks, combined with its bluster about community and social good, recall the tech industry playbook, and the brand can inspire rabid devotion among employees in much the same way. When I was a barista in Massachusetts, and later Rhode Island, I had colleagues who hung “how to make a mocha” posters in their apartments and in their off-hours drank Starbucks-branded liquor. But where Silicon Valley is known for its handsome payouts, full-time baristas at Starbucks, the foundation of the Third Place, make on average $28,000 a year. None of them are cashing out their Bean Stock and retiring anytime soon.
“There are many things I benefited from just by being here,” said Cohen, the Amherst shift supervisor. She has health insurance and is currently attending ASU. But in a decade with the company, she’s absorbed a few lessons about the limits of its altruism—particularly when seeking support for her colleagues as a supervisor. She was told a person had to have “an incredible, incredible” reason to ask for ten more cents an hour; those requests were almost always denied. She’s watched partners apply to the CUP Fund—a financial assistance program meant as an emergency safety net “in times of special need”—but she never saw it doled out, even in the case of a home in foreclosure or a dire medical emergency. Given all those speeches about investment in employees, Cohen thought the people actually doing the work could have a bit more say in what contributed to their quality of life. “We want, more than anything,” she told me, “for Starbucks to be the progressive company that they say they are.” It appears Cohen will finally get that chance: her store finally won its union vote in mid-March—but only by three votes.
Sydney Durkin found herself in a tight spot as a Starbucks brand ambassador when protesters smashed in the windows of her Seattle store during the summer of 2020. It made her colleagues feel powerless. When they asked for security to deal with irate customers, managers told them it would be at odds with the coffee chain’s vaunted culture. In the months after, Durkin estimates the store had a turnover of close to 95 percent. After two years of “absolute hell,” her store on Capitol Hill announced its intention to unionize.
Starbucks’ perks, combined with its bluster about community and social good, recalls the tech industry playbook, and the brand can inspire rabid devotion among employees in much the same way.
Durkin has been in food service since she was seventeen. She likes the work, enjoys interacting with customers and churning drinks out at a rapid clip. A nervous-system disorder has kept her in and out of hospitals for portions of her life; she is grateful to hold a job with benefits to help her get medication—even if the insurance premium costs her some $300 a month. She favored unionization because even good jobs in the industry have their limits: “Sure you might have high standards for the food industry,” she said. “But the food industry has extremely low standards of living. It’s not good.” In late February, Durkin and her coworkers were finally allowed to schedule a vote, which was unanimous. At the end of March, their store became the first in Starbucks’ hometown to form a union. It is located just a ten-minute drive from the company’s headquarters—a building to which Howard Schultz had recently, and unexpectedly, returned.
Schultz’s first tenure as CEO ended in 2000; eight years later, concerned with what he characterized as a movement away from Starbucks’ “soul,” he came back for a second term. Having restored the company’s vitality, the executive stepped down again in 2018 and soon got to work on the memoir-cum-managerial-Mad-Libs pegged to his ludicrous presidential campaign. The way to lead, Schultz wrote in From the Ground Up: A Journey to Reimagine the Promise of America, was by “unleashing expertise, ingenuity, influence, empathy, social networks, collaborative spirit, courage, technologies” and transforming “our common physical and virtual spaces into places where people can connect with civility and respect.” Schultz is now poised to unleash all those common nouns on Starbucks once again after Kevin Johnson, CEO since Schultz’s last tour, announced his retirement. He will temporarily be replaced by Schultz, who will earn $1 a year to convince baristas a union isn’t right for them. In a statement, Schultz wrote the company must “continue to earn the trust of our people” by acting as “a responsible community member and corporate citizen.”
As Schultz meditates on his role as a responsible member of the global corporate community, those Littler Mendelson lawyers are toiling to obstruct and stall unionization votes. Less than six months since the first Buffalo store announced its union drive, the store-by-store organizing model appears to have cost the company millions of dollars in legal fees, not including all the cash wasted flying executives across the country to try to play whack-a-mole with sympathetic employees, or the forthcoming raises, improved benefits, and better equipment Johnson promised at a recent shareholder meeting. But even if only one hundred company-operated stores of the thousands in the United States get all the way to a union vote, Starbucks has already lost.
None of the unionizing baristas I spoke to thought the company was fighting them out of concerns for the bottom line. It was about pride, said one, it was about “control.” Starbucks is a “socially conscious” company from the top down, a relic of an era when a CEO could be described as virtuous for acknowledging that his business was extractive and selectively addressing this. In the 1990s, as Starbucks was advertising its new benefits plan, Nike created a department to monitor the working conditions of its factories. PepsiCo withdrew investment from Burma. Shell began publishing a “transparency and sustainability report.” But a lot has changed in the decades since corporations began tripping over themselves to appear progressive; a lot has changed, too, since the state classified the workers blending endless Frappuccinos as “essential” and required they return to work in the middle of a mass death event. The unionization campaigns have put Starbucks in the middle of what I imagine would be a conscious corporation’s worst nightmare: having to either cede control of the definition of doing “responsible” business, or admit those measures were farcical all along. Starbucks has chosen the latter, which is probably humiliating for the three-time CEO. But apparently not as humiliating as letting the people he describes as the heart and soul of his beloved company decide for themselves whether the service jobs he created, to great fanfare, are actually any good.