Tossing and Tortured 'Till Dawn

I come back to you now, at the turn of the tide.

Friday, January 30, 2009

I keep wanting to write about the sorts of day to day things that you, dear rider, might be interested in, like details of my trip to Spain, or how cycling in the snow went, or the flaritalutions of the umdurians.

Instead, all my fingers are inclined to type about is the demise of Starbucks, a former employer of your humble narrator.

Warning : this is fairly verbose. The concise version is this: Starbucks has increased its demands upon workers, while significantly decreasing the benefits it offers to them.

Not to terribly long ago I wore a green apron, and reasonably proudly: Sure, they were a publicly traded company, but they were a smart one. An ethical one, who paid their employees a benefits package that was actually livable, that treated growers well and maintained high standards in producing excellent coffee.

Yes, in their transition to the ubiquity they'd sacrificed being a 10-out-of-10 coffee supplier to a solid 7, but you could get that 7 anywhere you pleased. In addition, they'd opened up a whole new market for independent coffee shops to provide that superlative coffee experience. Or whatever you'd like to call it.

There would be no Stumptown if not for Starbucks, I promise you that much.

A year or so ago, sure, the slumping economy was kicking SBUX in the shorts the way it was everybody else, but like their mission statement pointed out, profitability was important to future success, but the goal was building sustainable value and involvement with customers, communities, and coffee -- not day to day share prices. When Howard Schultz returned to his CEO post after an absence, he expressed his displeasure with some of the slack in coffee standards that had slowly eroded the quality of espresso drinks at the 'Bux.

Not that 90% of American consumers WANT quality espresso drinks at Starbucks, but that's beside the point.

Schultz restored some of the standards that some might think would be a given -- using a freshly rinsed shot glass for each shot of espresso, or ensuring that shots were appropriately timed before serving them to customers.

It didn't last.

Quickly, as short-term profits declined, Starbucks re-wrote its mission statement. No longer was "Premiere purveyor of finest coffees in the world," included. Instead, though, there WAS a statement about the S-word. No, the other one. Shareholder Value. That one.

And, as the stock price of a luxury good drifted down with the rest of the economy, predictable but deplorable decisions were made.

Among them, coffee standards were let go -- we stopped providing two rotating coffees weekly, most stores stopped brewing anything but a single coffee for most of the day, and shot glasses went away nearly entirely. I'll say little more about the kind of quality that filtered down into espresso drinks when, shortly after a theoretical re-commitment to espresso quality, the next releases were sorbetto, smoothies, and whacky "tea lattes."

But honestly, the race towards coffee mediocrity was no surprise to me. For most Starbucks customers, like I said, that ship had long since sailed. When you're getting two ounces of coffee along with eighteen ounces of milk, it really doesn't make any difference that this was good coffee, and it makes even less difference if you add two hundred calories worth of "naturally flavored" syrup to the mix. When making every good cup of coffee lengthens that drive-through line just a little bit more, I understand the march of efficiency over excellency.

That's not my beef today.

What pushed me over the edge was the sacfice of the employees -- ahem, sorry, the "partners" -- to the devil of the stock price. Retail employers are notorious for offering conditions that would please few bar Jurgis Rudkis. For a moderately challenging, mind-numbingly repetitive, artificially socially acclimated work environment, one is paid whatever minimum wage level one's state of residence cares to set, occasionally with another "perk" or two like a ten percent discount (Wal-Mart, Target) and some marginal level of health care with minimal to no employer contribution.

Starbucks stood out as an exception. This was the company that was consistently towards the top in the Fortune Top 100 companies to work for. You got a base pay that exceeded minimum wage -- by a little to begin with, and more in three months. Hourly employees split gratuity, which while not huge adds something like ten to twenty per cent to an employee's wages, a nice bump.

The total benefits package, though, was awesome. Even hourly retail employees, you got a sizable amount of vacation time, a fairly respectable 401(k) plan, personal days, and, of course very affordable health care -- this along with your 30% discount and free coffee.

While the 30% discount and free coffee have not ended -- and likely will not, I'd venture, since they make the company money -- the fringe benefits that make working at Starbucks a sustainable, livable experience have been considerably eroded, and with increasing layoffs and store closures, I'm concerned that the race to the bottom is not yet over.

Recently, Starbucks significantly increased its demands upon workers. As most in the service industry know, to make ends meet, it's typical to work more than one job, as being guaranteed full-time employment is unlikely, and even with a single full work-week, and entry-level employee is likely to need to supplement his income. Previously, there was no official definition of a "full-time barista." A new computerized attendance system was implemented which required "full-time employees," those working thirty or more hours per week, to be available eighty per cent of store operating hours.

For many stores, like the one where I worked open seven days a week, 0430 to 0100, this essentially means all of the time. Do the math, if you like. An employee's ability to have a second job is seriously reduced by demanding they be available this many hours, but, in return, all they get is the POSSIBILITY of full-time work. While the "full time" employees are given priority in scheduling over the "part time" ones, they are not promised any particular number of hours.

To make sure they keep working, the number of vacation days available to hourly workers was drastically reduced. Personal holidays, of course, had to go. The waiting period was doubled before one started accumulating vacation hours. If I am doing it right, let’s take an hourly partner – but one working forty hours per week – who has just completed their first year at Starbucks. Under the old version of vacation hours, they’d have about a week and a half of vacation available to them, and for their next year, they’d get two weeks, plus two “personal days,” use ‘em or lose ‘em.

The new version, the first-year employee would have about 2 days’ worth of vacation. Their second year, they’d get a single week.

Doesn’t that sound nice?

Of course, it’s likely they’ll have a lot less working hours, anyhow. I’m happy that I got out when I did, which is a pity – there was a day when I’d have happily recommended the job.

As far as I know, the flagship benefits like identical health care for part time workers and full-timers haven’t been changed. I think they’ll cut health care costs by eliminating the number of part time workers eligible for these benefits, since the new attendance system weights available hours differently for “full-timers,” leaving less space available for those who’d like to work more than twenty but less than about forty hours; working parents come to mind.
Paying about three-quarters of an employee’s health care costs, and offering things like same-sex partner benefits still puts SBUX ahead of many other retail chains in terms of total benefits package, and I shouldn’t dismiss that by this critique, but still: the slow erosion of quality benefits is one of the things that labor organizers attempt to prevent. Starbucks at one point also had significantly lower employee turnover than other retailers.

I wonder if that, too, will change.


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