Starbucks US Store Unionizes for the First Time in 50 Years... Workers Gain Strength

[Asia Economy Reporter Yujin Cho] The first union in 50 years has been formed at a Starbucks store in the United States, the world's largest coffee chain. As the COVID-19 pandemic has strengthened workers' power, it is expected that unionization efforts will spread further.

On the 9th (local time), according to the Wall Street Journal (WSJ) and others, the U.S. National Labor Relations Board (NLRB) announced that in the unionization vote at the Elmwood Avenue Starbucks store in Buffalo, New York, 19 employees voted in favor and 8 against.

If the vote is finally approved, it will mark the first union at Starbucks, which has 9,000 company-operated stores and 235,000 employees in the U.S. This is the first time a union has been established at a Starbucks company-operated store since its founding in 1971. The workers at the store will join the Service Employees International Union (SEIU) local and will be able to start negotiations with the company on wage increases and other matters.

Among two other Buffalo stores that also pursued union formation, the Camp Road Hamburg store saw unionization fail with 8 votes in favor and 12 against.

These stores began the unionization process at the end of August, citing dissatisfaction with working conditions such as labor shortages and insufficient training.

In addition, three other Starbucks stores in Buffalo and one store in Arizona recently submitted petitions for union votes, indicating that Starbucks' unionization movement is likely to expand further.

As a result, Starbucks' 50-year-long 'union-free management' has collapsed. The company, which had tried to block union formation through employee lobbying efforts over the past three months, is now in turmoil.

Kevin Johnson, Starbucks CEO, argued that the union formation would worsen the relationship between employees and the company and cause confusion. The company emphasized that it has implemented two wage increases over the past 18 months and that more than half of its U.S. employees earn at least $15 per hour, which is among the highest compensation levels in the industry.

In a recent filing with the Securities and Exchange Commission, Starbucks mentioned the potential risks of union organizing efforts, stating, "This could negatively affect how our brand is perceived and adversely impact our financials and business operations."

WSJ evaluated that this union formation came naturally amid the labor shortage following the COVID-19 pandemic, which has elevated workers' status. Although unsuccessful, Amazon warehouse workers in Alabama also attempted to form their first union in April.

It is very rare for unions to emerge in the U.S. food service industry, so there are expectations that workers' power will grow stronger after the pandemic. According to the National Labor Relations Board, as of last year, union membership among food service and bar employees was less than 2%.

In a situation where it is difficult to find new workers, companies are reluctant to lay off employees and are trying to retain existing workers. The U.S. recently recorded the lowest number of new unemployment claims in 52 years (184,000 claims last week) amid a severe labor shortage.