If only six months ago any talk of a Starbucks (SBUX) union seemed like a pipe dream of a small group of zealous employees, the movement now has both force and widespread support.
After employees at one Buffalo, N.Y. location were the first to for a union in December, 20 Starbucks locations followed suit, with over 200 others across the country currently in the process of seeking union votes.
Most recently, Starbucks employees voted to form unions in Massachusetts, Missouri, Illinois and the chain's home state of Washington.
As many locations count votes or formally post letter expressing desire for representation, these numbers get bigger day by day in a movement that is clearly rattling the coffee chain's top execs.
Starbucks Is Clearly Scared. Should It Be?
While Starbucks has publicly confirmed employees' legal right to unionize, news coverage of what many see as an aggressive anti-union effort is quickly picking up steam.
In the winter, seven Memphis employees who were involved in a union drive were terminated by the company for minor violations like being seen without a mask or entering the store through the wrong door.
Recently, returning company CEO Howard Schultz spoke of companies being "assaulted" by the "threat" of unionization.
"If you hate Starbucks so much, why don't you go somewhere else," Schultz recently told one California barista leading a mobilization drive.
Before the union effort took off with such force, employees would routinely bring up understaffing, faulty equipment and underpayment despite record Starbucks sales of $29 billion in 2021.
Starbucks national minimum wage pay begins at $12 and, while Starbucks has committed to raising it to $15 by the summer, inflation and a sky-high housing market creates a situation in which many who work a full work week and still fall below the poverty line.
When Did The System Break Down?
Joseph McCartin, a history professor and executive director of the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University, told TheStreet that the chain is a test case.
"Starbucks, like all employers who are faced with emerging unions, will try to make concessions of various kinds on wages and other issues all in order to avoid dealing with workers collectively," he said
"It goes beyond questions of budgets and money to the question of power and autonomy."
According to McCartin, the problem also goes beyond Starbucks or Amazon (AMZN), another major retailer that has been seeing a snowballing union drive.
It is an example of middle-class jobs that no longer offer the security or upward mobility that they did in the mid-20th century.
When people working full-time are not able to buy a home, finance their children's educations or feel even remotely financially secure, employees have less to lose and become more interested in protest and unionization.
"They're called partners but in reality don't really have a say in the organization of their work and certainly not their salary and benefits," McCartin said.
"If you really want to partner with the people who make Starbucks a profitable business, then you should be negotiating with them."
But Will Latte Prices Go Up, Though?
The question on many people's minds is whether a successful union will inevitably cause Starbucks to raise prices.
Between inflation —grocery prices already rose 7.4% between 2020 and 2021 — and regular increases observed every year, this is a likely scenario.
But there is also a limit to how much Starbucks can charge before consumers start getting annoyed and take their business elsewhere.
Menu items across the chain already rose by an average 8% in 2021. Such a large increase has not been seen in more than 20 years.
"There could be a limit to how much customers will pay; coffee is a competitive business, even if Starbucks is a brand that consumers typically love," Justin Pope recently wrote for The Motley Fool.
"If Starbucks must absorb or raise prices to compensate for union-driven cost increases, it could either turn off consumers or hurt its financial results."
Union-Bashing Is Increasingly Bad For Business
On the other hand, Starbucks' anti-union crusade is also earning it a significant amount of bad publicity that could end up hurting the bottom line.
It could wind up altering business strategy in another way.
Maury Peiperl, dean of George Mason University's School of Business, told TheStreet that Starbucks has a customer base that is "on the whole a lot more progressive."
It may become increasingly put off by any new headlines about firings and threats on the part of Starbucks.
A recent survey found that 69% of the people who visited a Starbucks in the last four months supported employees' unionization drive.
"Treating workers better and paying more to do that has to at some point affect prices but then the question becomes 'what is the minimum level of support that your people deserve?'" Peiperl told TheStreet.
