Starbucks to pay minimum wage as coffee price war looms
Thousands of Starbucks employees will benefit from a 6% pay rise under the new National Living Wage – even if they’re under 25. The company said all baristas, regardless of age, will earn £7.20 an hour, up from the current base of £6.77, while supervisors will earn £8.72, up from £8.20.
Those working in London will also get a premium although the level of this is yet to be announced. The Seattle-based company, which has around 500 coffee shops in the UK, said that coffee prices would be unaffected by the decision.
This could be at odds with Costa Coffee whose boss, Andy Harrison, said it planned “some selective price increases” to combat the increased cost of paying the National Living Wage.
The minimum wage legislation announced by Chancellor George Osborne in July is due to take effect next April. It will start at £7.20 and is expected to rise to £9.35 by 2020 for all workers aged 25 and over.
The fact that Starbucks will pay the National Living Wage to all workers will be welcome news to employees at the coffee chain, over half of whom are under 25. Its decision to extend the minimum wage to all of its workers silences critics who argued that companies who employ large numbers of low paid workers will merely employ more under-25s to avoid paying the higher rate.
A spokesperson for the firm said: “The company is ensuring the increase in salary applies to all employees and will not use lower rates for younger partners or apprentices.”
Business Secretary Sajid Javid said: “Every part of Britain should benefit from our growing economy and now is the right time to ensure fairer pay for low-wage workers.
“So it’s hugely welcome to see that Starbucks is extending the National Living Wage to all of its staff.” Lidl announced last week that it, too, would pay the National Living Wage to all of its workers.
Last year, Starbucks boss Howard Schultz had a total pay package of $21.5m (£14.1m), equivalent to about 1,200 full-time baristas on the new National Living Wage. Mr Schultz is in line for another bumper package following the firm’s 54% share price rise in the last 12 months.