Starbucks to Raise Wages Up to 15%

By Joshua Jamerson 

Starbucks Corp. will give many employees in its U.S. stores a raise this year, a move that comes as a tightening labor market has put pressure on some U.S. companies to boost wages.

The Seattle-based coffee chain said that effective October 3, employees in its company-operated stores will receive an increase in base pay of 5% or more, depending on geographic region and market factors.

Starbucks operates roughly 7,600 -- or 60% -- of its more than 12,700 stores in the U.S. The company doesn't disclose pay for its store workers but a spokeswoman said employees are paid above minimum wage, whatever it may be from region to region.

The company also said it would double the annual stock award for employees who reach two years of continuous service with the company. The combination of the changes will result in overall compensation increases between 5% and 15%, the company said.

Starbucks spokeswoman Jaime Riley said the company's decision to raise compensation was based on attracting and retaining good employees and "listening to their feedback."

For the first time since the financial crisis, workers are demanding raises and actually getting them, The Wall Street Journal has reported. The number of workers quitting jobs has increased, a sign they are confident they can get new jobs, and companies are loath to lose good workers.

In April, Starbucks said profit increased 16% as it drew in more mobile users in the U.S., but sales missed Wall Street expectations. The company is expected to next report results on July 21.

Starbucks stock edged down 0.5% to $56.24 in afternoon trading.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

July 11, 2016 14:52 ET (18:52 GMT)

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