With CEO Pay Skyrocketing, the Unionization Surge is Hardly Surprising

In just a little over six months, the number of Starbucks outlets where workers are represented by a union has spiked from zero to 165.

This pro-union wildfire is stunning. But should it be unexpected?

After more than two years on the frontlines of a pandemic, low-wage workers like those at Starbucks have seen modest increases in their wages. But in most cases, these raises have been overtaken by inflation. And meanwhile, paychecks for those at the top of the corporate ladder are soaring.

A recent Institute for Policy Studies report found that the average pay gap between CEOs and median workers at the 300 U.S. corporations with the lowest median worker pay hit 671 to 1 in 2021, up from 604 to 1 in 2020.

At Starbucks, the gap was even larger.

In 2021, the company’s then-CEO Kevin Johnson $20.4 million, while median worker pay at the chain was under $13,000. It would take that typical Starbucks worker 1,579 years to make what Johnson made in just one year.

Austin, Texas-based barista Morgan Leavy recently told members of Congress what it’s like to be on the bottom end of Starbucks’s extreme pay divide.

“Many ‘partners’ live paycheck to paycheck and work one or more side jobs to make ends meet,” Levy explained at a Capitol Hill briefing organized by the Poor Peoples Campaign. “If you try to ask for over 30 hours a week, it’s never guaranteed.”

.@Starbucks workers like Morgan Leavy have organized more than 150 stores in the US. Starbucks needs to commit to bargaining in good faith with these workers! pic.twitter.com/jVUb5GQV5T

— Kairos Center (@KairosCenterNYC) June 15, 2022

Starbucks does offer health benefits for employees who work an average of 20 hours a week, but Levy said many employees can’t afford to access it.  The union also alleges that company officials have threatened to strip transgender employees of the gender-affirming health care coverage the firm now offers if those employees vote union. One Oklahoma store where workers say this healthcare was threatened just voted overwhelmingly to unionize.

Starbucks employees aren’t the only low-wage workers who are turning to collective bargaining as an avenue towards decent pay and benefits. Among the 300 companies in the Institute for Policy Studies report, we know of at least six others where workers have been attempting to unionize: Starbucks, Target, Amazon, Dollar General, Maximus, and Chipotle.

All of these companies paid their CEOs at least $7.9 million in 2021, with the new Amazon CEO, Andy Jassy, raking in a staggering $212.7 million. Each of the six has a ratio of CEO to median worker pay above 200 to 1, with Amazon’s by far the largest. Jassy made 6,474 times as much as his typical employee.

The embattled Starbucks board has replaced CEO Johnson with company founder Howard Schultz, a man who resides on an even more distant economic planet than his typical workers. The value of his personal holdings of Starbucks shares, as of June 17: $1.6 billion.

Schultz said in an interview that he would never engage with the union, while still touting the firm as a “good employer.”

That “good employer” image has been shattered by the approximately 200 complaints filed against the company for labor rights violations and the NLRB seeking a court order to stop Starbucks’ union busting. If Schultz wants to bring that reputation back, he’ll have to address the day-to-day reality of working in one of his stores.

“So many of us never get a break from the cycle,” barista Levy explained. “We never get to breathe financially. We are always looking for a new side hustle or staring into the black hole of student loans…We deserve livable wages, affordable healthcare, student loan forgiveness, and protection for our civil right to organize with the union.”

“With Starbucks’s billions,” Levy said, “Starbucks workers should not be poor people.”