During a Senate hearing to discuss the popular coffee company’s labor practices, Starbucks founder and former CEO Howard Schultz defended the right to his billion-dollar fortune against Senator Bernie Sanders’ (I-VT) criticism.
Key Details
- In his opening statements, Sanders criticized the pay gap between Schultz and Starbucks workers while supporting the employees’ unionization efforts.
- “Your billionaire moniker constantly is unfair,” Schultz said in response to Sanders’ criticism. “Yes, I have billions of dollars. I earned it. No one gave it to me. And I’ve shared it constantly with the people of Starbucks.”
- Schultz appeared before the Senate Health, Education, Labor, and Pensions Committee voluntarily after Sanders threatened to subpoena him as part of the committee’s investigation into Starbucks’ handling of federal labor laws, Forbes reports.
- During the committee’s questions, Schultz responded to concerns that he had intimidated workers by saying that comments may have been misinterpreted.
- Several Republican senators on the committee defended Schultz, including Markwayne Mullin (OK), Mitt Romney (UT), Bill Cassidy (LA), and Rand Paul (KY.)
Why it’s news
Starbucks’ employee union represents more than 250 stores that have voted to unionize—there are about 16,000 Starbucks locations in the U.S. Since 2021, the union has filed hundreds of complaints against the company, citing unfair labor practices. In a few cases, the National Labor Relations Board (NLRB) has ruled that Starbucks illegally fired employees for participating in union activities.
During the committee hearing, Sanders cited reports from the NLRB that claim Starbucks has more than 100 labor law violations in the last 18 months alone. Starbucks is fighting many of these allegations, and Schultz said during the hearing that he believes the allegations “will be proven false.”
Schultz has long opposed unionization efforts, though, during the committee, he acknowledged workers had the right to form a union, Forbes reports.
In his prepared remarks, Schultz outlined the employee benefits for Starbucks workers:
“Exceeding the expectations of our partners includes a legacy of industry-leading benefits for all eligible full-time and part-time partners. We were among the first companies to provide comprehensive health care to part-time employees starting 35 years ago, in 1988, and we have provided 401(k) benefits to eligible partners since 1987. The term ‘partner’ is not simply a moniker. Since 1991, we have issued ‘Bean Stock,’ equity in the form of stock ownership, to all eligible full-time and part-time partners, the first company to do so, to underscore our commitment to shared ownership and success.” Schultz says.
The company-wide minimum wage for Starbucks employees is $15 an hour, though, in some locations, it is $17 to $19 per hour—higher than the national average.
Since becoming CEO for the first time in 1986, Schultz has helped grow the coffee company from a Seattle-based coffee shop to a global empire. His estimated network is $3.7 billion, Forbes reports. He has served as the company CEO on three separate occasions. He stepped down from his third tenure last week.
Bipartisan reactions
Sanders, who chairs the committee, criticized Starbucks and Schultz intensely during his opening statements.
“Over the past 18 months, Starbucks has waged the most aggressive and illegal union-busting campaign in the modern history of our country,” he says.
Schultz received support from multiple Republican senators, including Rand Paul, who called the committee investigation a “witch hunt” and says, “Count me as one who is ecstatic that Starbucks is an American success story, and I’ll have no part in trashing their success.”
