That quick cup of Starbucks just got a little sweeter. Starbucks Coffee announced that after a decade of work, the iconic coffee company has achieved an equal wage for all its employees, regardless of race and gender, in the United States. 10 years ago, we began working in earnest to make sure women and men, of all ethnicities and races, are well compensated at Starbucks,” Lucy Helm, Starbucks’ chief spouse officer, said in a press release. Starbucks joins a developing trend among consumer goods giants and generation corporations deciding to innovate on the human capital curve by equalizing pay before being required by law, as is the case in Iceland, Germany, and the United Kingdom.
Of all the new policies Starbucks has adopted, one of the most revolutionary is a commitment to radical transparency in salary discussions. Starbucks has established a policy that the company will retaliate or discriminate against workers who discuss wages, and also be open to communicating any unexplained pay gaps. This affirmative policy reflects the type of openness in earnings discussion that is part of the millennial perspective on compensation, and ignores the typical salary secrecy technique that many corporations have traditionally followed.
Starbucks’ decision to begin transparent conversations about pay signals a larger shift in how major U. S. companies can manage equal pay. “Pay equity is no longer a defensive conversation, but a badge of honor that corporations see as imperative to attracting and retaining top level-headed talent,” said Natasha Lamb, managing wife at Arjuna Capital, an investment firm. investments aimed at sustainability and that have an effect on investment. Lamb has worked with shareholders at dozens of corporations to narrow the pay gap, most recently adding JP Morgan Chase and American Express. In fact, seven of the world’s largest monetary corporations have announced proactive measures to eliminate gender pay inequality in reaction to Arjuna Capital shareholder proposals that include detailed reporting on pay data. Arjuna Capital has also worked with Starbucks shareholders, and Lamb commented that Starbucks publicly reported a 99. 7% pay hole in 2017. “Starbucks achieved pay equity in just one year. And they have been transparent with their workers and their investors. The matrix. . . It’s huge,” Lamb said. In addition to publicizing the hole and its ability to close it, Starbucks continues its unexpected push to build equal pay as a new hallmark of human capital development.
Starbucks also isn’t on this transformational path by themselves. The American Association of University Women (AAUW) worked with Starbucks to help align their existing corporate values with equal pay best practices. As Kim Churches, CEO of the AAUW, pointed out that “pay equity can have an enormous and positive ripple effect in strengthening families, communities, the tax base and the economy as a whole. Achieving parity for gender, race and ethnicity is an opportunity for us as a nation to become stronger,” Churches said. While there might be many implementation details, Churches notes that “it’s immensely solvable.” If solved, that boost to the economy isn’t just an abstract concept. A 2017 report by the Institute for Women’s Research found that if men’s wages stayed the same, achieving equal pay for women would add a whopping $512.6 billion to the U.S. economy.
While Starbucks has yet to audit pay equity globally, its executives are determined to continue their efforts. ” We believe it is vital to inspire others to join us in seeing the importance of this issue, not only for our partners, but also for women around the world,” Helm said. This move toward pay equity around the world can generate billions in additional gains for the global economy.
Key takeaways for an equivalent salary culture at Starbucks: