Starbucks Workers in Chile Strike for More Benefits

Investor Place: Starbucks isn’t exactly known as a corporate villain. It has a grandiose sustainability vision and is working on a comprehensive cup recycling plan. It offers benefits for baristas – including health care for dependents and unmarried partners. And it has a loyal following of java junkies nationwide.

But to hear some in Chile say it, Starbucks isn’t doing enough. Workers at Starbucks’ Santiago cafes have a list of demands, and some of them might shock you.

For starters, they want SBUX management to send them a check when they have a baby. Seriously.

Besides a salary increase, Starbucks says the union in Chile has a list of 25 different demands. These include a cash bonus when a worker gets married or has a child. Employees in Chile also want a $100-per-month lunch stipend so they can offset the cost of meals bought during long shifts.

True, entry-level pay for a barista in Chile is a mere $3.30 per hour. But it’s difficult to muster sympathy around the globe for demands like that – especially in a job market where many have seen reductions or outright cuts in more crucial benefits such as health insurance or retirement plans.

Adding another odd level to this strange work stoppage is a dispute over just how widespread or serious the “strike” is. Starbucks workers have been protesting in front of the company’s 31 Chilean cafes since July 7, but the coffeehouse chain says its own records show the government’s finding of a strike – that is, more than 50% of its unionized workers refusing to show up for work on July 7 – was incorrect.

So what effect will this have on Starbucks in the U.S.? Well, the bottom line is it won’t affect the bottom line much. But strangely enough, the dustup might serve to provide some sympathy from Starbucks employees and customers back in the states for their beloved Seattle coffee brand. Starbucks has seen some bad news lately, including news of rising Starbucks coffee prices to offset inflation. It’s hard to argue that Starbucks is an evil corporate overlord when competition is fierce, its costs are rising and SBUX has such a good track record with its workers in the U.S.

It doesn’t hurt that most American workers find the idea of an employer providing “lunch money” almost laughable.

Of course, it’s hard to tell what will push even the most loyal customers and employees over the edge. There were reports recently that tech darling Apple Inc. is facing a meager unionization effort by some Apple store employees who want to bargain for better pay and benefits. Though a small group, these workers claim to be undercompensated in relation to Apple’s huge revenue stream.

Starbucks isn’t Apple, but its stock has soared more than 55% in the past year, almost three times the broader market. After some steep declines, revenue is back above pre-recession levels. And in its upcoming quarterly earnings report July 28, SBUX is expected to see profits grow 17% year over year.

Some folks might think that kind of growth in challenging times means Starbucks can afford to treat its employees better. And that argument might hold water for a cost-of-living increase. But whether shared success means a cash bonus for having a baby is a different story.


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