Starbucks was founded in 1971 in Seattle, Washington. The company expanded across the United States and by the late 90’s had retail locations in Europe and East Asia. Starbucks’ mission statement is to “inspire and nurture the human spirit” and through delicious coffee and myriad social and labor initiatives, they seem to achieve just that.
Famous for their progressive corporate culture, Starbucks has been at the forefront of corporate social responsibility since its inception. Today, the majority of Starbucks’ employees, or partners as the company likes to call them, identify as female and nearly half of all Starbucks partners also identify as BIPOC. However, Starbucks has also been at the center of labor rights controversies due to their supply chain sourcing, and still struggles with diversity in management positions. The company recognizes many areas for opportunity and funds myriad programs it hopes will foster more diversity in the future and also self-audits their internal "civil rights" each year.
So what does Starbucks do to be a good employer?
First of all, Starbucks, like many companies, offers employee resource groups (ERG's), Starbucks calls their ERG's “Partner Networks”, the first of which was the LGBTQ Partner Affinity Group which was formed in 1996 (Starbucks, 2020). These partner networks offer support to diverse categories of employees and advise Starbucks’ corporate leaders on diversity and inclusion issues (Starbucks, 2022). These partner networks also play a role in marketing and branding as well as diversity and inclusion training. For example, the Black Partner Network was tapped to create t-shirts that showcased the company’s support for the Black Lives Matters Movement (Wong, 2020), and partnered with Arizona State University to develop a 15-course anti-bias curriculum offered at no cost to both Starbucks’ partners and the general public (Faller & Greguska, 2020).
Speaking of Arizona State University, Starbucks' SCAP program (Starbucks College Achievement Plan) pays for four years of tuition up front on behalf of an employee who wishes to obtain an undergraduate degree from Arizona State University. Starbucks’ SCAP program has seen an 8% rise in enrollment in the past two years and 41% of participants are BIPOC (Covington & Burling LLP 2021, p.18). I spoke with a friend and former Starbucks employee about her time with the company, and she pointed out that in addition to their partner networks, Starbucks offers free therapy sessions for their partners, which she says can be really helpful when dealing not just with personal issues, but a lot of difficult situations on the job.
Starbucks’ staff is relatively diverse as well. Just under half of their employees identify as non-white, and the majority of employees identify as female, too. However, 63.9% of corporate employees are white and more than 70% of corporate management is white. In their retail stores, over 60% of management is white while BIPOC employees represent most entry-level positions (Starbucks, 2022b). To Starbucks’ credit, they offer this information readily on their own website and have a tool which allows you to view their employee demographics by gender (though this is most likely actually referring to employee sex as there is only a male or female filter), race, and the intersection of the two as well as filters for sector (corporate, manufacturing, or retail) and job level. This illustrates that, at the very least, Starbucks understand the relevance of intersectionality, though there is work to be done on gender and LGBTQIA+ statistical representation. You can see a few examples below.
(Starbucks Corporation, 2022)
(Starbucks Corporation, 2022)
(Starbucks Corporation, 2022)
As I mentioned, Starbucks as positioned themselves as a leader in the sphere of corporate responsiblity and readily showcases their efforts to be diverse and inclusive. So what does “diversity” mean to Starbucks? Starbucks approaches diversity as a formula:
Diversity = Inclusion + Equity + Accessibility
Starbucks states they are “dedicated to creating a workplace that values and respects people from diverse backgrounds, and enables its employees to do their best work… [and] we expect our partners to act with a spirit of kinship, tolerance and humanity towards all customers, making our brand welcoming to everyone.” (Starbucks, 2019). Starbucks is also one of only a few major corporations to maintain pay equity between men and women and all executives have at least a portion of their compensation linked to meeting D&I initiatives goals. Furthermore, Starbucks uses an applicant tracking system that tracks promotion and hiring decisions for diversity auditing purposes (Covington & Burling LLP 2021, p. 22) and partners with the analytics firm Covington to assess their in house civil rights each year.
Though race and gender (sex) statistics seem to be the focus of Starbucks’ demographic reporting, they highlight much of their D&I initiatives through blog posts called “stories” on their website. One of these stories highlights their history of LGBTQ+ advocacy and inclusion
Some highlights are:
Starbucks has officially participated in Pride celebrations for over 20 years.
Starbucks sponsored the Equality Act in congress.
Starbucks has been awarded a score of 100 on the HRC’s Corporate Equality Index several times.
In 1996 Starbucks’ first ERG , LGBTQ Partner Affinity Group, is formed.
Starbucks began offering full health benefits to eligible full- and part-time employees, including coverage for same-sex domestic partnerships In 1988.
(Peiper, 2019)
Starbucks also voluntarily recognizes LGBTQ+ owned coffee suppliers as a diverse group in their
analytics on product sources which is not federally required (Covington & Burling LLP 2021, p. 22).
Overall, Starbucks does an above average job with its diversity and inclusion initiatives and
has been an early corporate advocate in many realms of social justice and the company has
the track record to prove it is good place for people of minority status to work - as long as
you are a corporate or retail partner. This focus on human welfare flounders when we begin to examine the aspects of Starbucks' business that are not in the spotlight. Unfortunately, a major point of ethical failing Starbucks’ product sourcing methods, which stand in contrast to their treatment of their in-house employees. The company does not source much of their coffee from fair trade sources (only about 8% or less, depending on the year) and has a history of sourcing products from plantations in Latin American with severe labor violations.
Starbucks is proud to showcase how it audits its supply chains through its C.A.F.E. program, which focuses on four areas: economic transparency, social responsibility, environmental leadership, and quality (Starbucks, 2020a) and (conveniently) the company uses an in-house rating system to assess the ethicalness of their suppliers (Canning, 2019). According to Starbucks’ own metrics, 99% of their coffee products are sourced form ethical sources. However, they do not mention that they pay about half of fair trade prices and only one third of what many advocates for farmers’ rights say is a living wage (Canning, 2019). And, worse than the unethically low price they pay their suppliers, are the working conditions on many of these plantations. In 2018 investigators with the Brazilian Labor Ministry found a plantation in rural Mines Gerais state, which Starbucks conducted business with, housed their workers in “substandard housing without sewerage or drinking water” and 18 workers were rescued from conditions “analogous to slavery”. This farm bore a C.A.R.E. certification from Starbucks and, according to a Starbucks official, was thoroughly audited (Scherer, 2018). These audits happen once a year, at most, however, and leave plenty of room for plantations to abuse the system. The Guardian also published an investigation that filmed children as young as 8 working “working 40-hour weeks in grueling conditions, picking coffee for a daily wage little more than the price of a latte” on farms in Guatemala that are know to do business with Starbucks (Doward, 2020).
So while Starbucks has a history of commitment to diversity and inclusion, their own statistics show BIPOC employees are still underrepresented in positions of power and, more troublingly, their supply chain is littered with serious labor violations that represent some of the most striking examples of inequality one can find in our modern world. Additionally, Starbucks has still not managed to offer a livable minimum wage to its employees in the United States (though they plan to increase their minimum pay to $15 an hour over the next two to three years) (Covington & Burling LLP, 2021, p.18), and recently the company has faced accusations of age discrimination (Benjamin Ford, 2013).
One must also recognize that a key element of Starbucks’ business is their cultural relevancy and their “feel good” reputation. Being at the forefront of hot-button social justice issues serves to drive sales for Starbucks, which is possibly why we see such a difference in their initiatives at home versus their commitment to human rights in their supply chains. Simply put, Starbucks’ supply chains are not in the spotlight and thusly there is less incentive for the company to affect change in this part of their business. However, choosing to implement more ethical supply chain policies would likely not be cost-prohibitive for Starbucks. Ironically, the company itself recognizes that, because they purchase a whopping 5% of all coffee produced each year globally, their power to change producers lives for the better is huge (Ko, 2021).
Starbucks’ profit rose 24% in 2021 to $29.06 billion USD (Locke, 2021) despite a global pandemic that stymied consumerism globally, but they paid on average just $0.90 USD per pound of coffee purchased. Starbucks states they purchase 800 million pounds of coffee each year (Ko, 2021), which shakes out to about $720,000,000 USD spent on coffee. If Starbucks chose to pay their suppliers $1.60 USD per pound (the minimum price set by the fair trade standard), they’d spend $1,280,000,000 USD, a cost increase of $560,000,000 USD, which is a drop in the bucket compared to their $29.06 Billion USD profit. So why not increase employee wages more expediently, or increase supplier compensation to a livable wage when the company would still net billions in profit? The short answer is that, for all of the good Starbucks does, their bottom line still seems to trump their duty to implement ethical standards.
In the context of an economy in which we are forced to choose lesser evils, Starbucks is a great place to work if you're based in the United States. The radical humanist in me, however, would like to see companies like Starbucks cut into their corporate profits and do even more good. In the meantime, I still frequent my local coffee shops, and encourage others to do so more often as well.
References
Benjamin Ford, C. (2013, February 22). Former employee takes on Starbucks, citing age discrimination [USA] - Business & Human Rights Resource Centre. Business & Human Rights Resource Centre. https://www.business-humanrights.org/en/latest-news/former-employee-takes-on-starbucks-citing-age-discrimination-usa/
Canning, A. (2019, June 17). Starbucks has a Slave Labor Problem. Fair World Project. https://fairworldproject.org/starbucks-has-a-slave-labor-problem/
Covington & Burling LLP. (2021, March 31). Starbucks 2021 Civil Rights Assessment. Starbucks.Com. https://stories.starbucks.com/uploads/2021/03/Starbucks-2021-Civil-Rights-Assessment.pdf
Doward, J. (2020, March 1). Children as young as eight picked coffee beans on farms supplying Starbucks. The Guardian. https://www.theguardian.com/business/2020/mar/01/children-work-for-pittance-to-pick-coffee-beans-used-by-starbucks-and-nespresso
Faller, M. B., & Greguska, E. (2020, June 16). “To Be Welcoming” curriculum offers tools to counteract bias. ASU News. https://news.asu.edu/20200616-solutions-be-welcoming-curriculum-offers-tools-counteract-bias
Ko, M. (2021, September 29). Working to create a more sustainable future of coffee for all. Starbucks Stories. https://stories.starbucks.com/stories/2021/working-to-create-a-more-sustainable-future-of-coffee-for-all/
Locke, N. (2021, November 25). Starbucks quarterly revenue worldwide 2021. Statista. https://www.statista.com/statistics/218404/quarterly-revenue-of-starbucks-worldwide/
Peiper, H. (2019, May 31). Timeline: Starbucks history of LGBTQ+ inclusion. Starbucks Stories. https://stories.starbucks.com/stories/2019/starbucks-pride-a-long-legacy-of-lgbtq-inclusion/
Scherer, G. (2018, September 18). Slave labor found at Starbucks-certified Brazil coffee plantation. Mongabay Environmental News. https://news.mongabay.com/2018/09/slave-labor-found-at-starbucks-certified-brazil-coffee-plantation/
Starbucks. (2019). Diversity at Starbucks. Starbucks. https://www.starbucks.ph/about-us/our-company/diversity-at-starbucks
Starbucks. (2020a, February 28). C.A.F.E. practices: Starbucks approach to ethically sourcing coffee. Starbucks Stories. https://stories.starbucks.com/press/2020/cafe-practices-starbucks-approach-to-ethically-sourcing-coffee/
Starbucks. (2020b, August 24). Starbucks Partner Networks help create a culture of belonging. Starbucks Stories. https://stories.starbucks.com/stories/2020/starbucks-partner-networks-help-create-a-culture-of-belonging/
Starbucks. (2022a). Our progress on advancing equity and inclusion. Starbucks.Com. https://stories.starbucks.com/uploads/2022/01/SBX220112-Starbucks-Inclusion-and-Equity-Infographic_8.5x14in_2.pdf
Starbucks. (2022b, January 11). Workforce diversity at Starbucks. Workforce Diversity at Starbucks. https://stories.starbucks.com/stories/2020/workforce-diversity-at-starbucks/
Wong, E. (2020, December 1). Employee Resource Groups (ERG) guide. Themomproject.Com. https://community.themomproject.com/the-study/employee-resource-groups-erg-guide