Starbucks Workers Plan Strike in Chile
Submitted on Thu, 07/21/2011 - 1:03pm
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By Julie Jargon - Wall Street Journal, July 6, 2011
In what would be Starbucks Corp.'s first strike at a company-owned store, baristas at the chain's outlets in Chile plan to walk out Thursday because, they say, their wages are so low that they can't afford to buy lunch.
Unionized employees at 30 of Starbucks's 31 Chilean stores plan to walk out for as many as several days, said Andr?s Giordano, president of the union, Sindicato de Trabajadores de Starbucks Coffee Chile.
Mr. Giordano, a 24-year-old shift supervisor in Santiago, said the starting hourly wage for Chilean Starbucks workers is the equivalent of $2.50, and it hasn't changed in eight years.
"Lunch in Chile costs $5 to $6," he added.
The Chilean workers have been pressing for a lunch stipend since they organized two years ago. Starbucks managers in Chile get a monthly "lunch bonus" of $50, while other employees are offered two free coffees a day. "I would prefer to eat a sandwich," Mr. Giordano said.
The skirmish underscores one of the challenges U.S.-based companies like Starbucks face as they expand their global footprint. Multinational companies seeking to enter new markets often have to deal with local labor groups and government requirements to honor collective bargaining.
As a condition of merging with African retailer Massmart Holdings Ltd., Wal-Mart Stores Inc. recently agreed to honor union-bargaining agreements for three years.
Starbucks has had to comply with government-mandated participation in collective-bargaining agreements in Brazil and Argentina. The company has also clashed with workers who tried unsuccessfully to organize in Europe and New Zealand, and it has battled with unionized workers in North America, where 300 employees are members of the IWW Starbucks Workers Union.
Chile, which Starbucks entered in 2003, is the only country where Starbucks operates with a sizeable union presence. Roughly a third of the company's 670 baristas there are organized.
In April, the union presented Starbucks with a proposal seeking a monthly lunch bonus of $100 and listing about 20 other requests, such as having the company assume the full cost of employee health insurance. Because the demands haven't been met, the union voted on June 25 to strike.
"We feel their list of demands far exceed the industry and business norms for Chile," Starbucks spokesman Jim Olson said.
He added that Starbucks offers a number of benefits that go "far above and beyond" what other retailers in Chile offer employees. All Starbucks workers there get a 30% discount on food sold in the stores, 70% of their health-care costs paid by the company and company stock.
For the strike to be valid, half of the unionized Chilean members, plus one, have to walk out Thursday. If the strike does occur, "we still believe we'll be able to keep all of our stores open," Mr. Olson said.
Mr. Giordano said that the company has threatened to fire or withhold promotions for the organized workers. As a result, Mr. Giordano said, the number of workers in the union has dropped to 200 from 270 in the last two months.
"These are completely false claims," Mr. Olson said. "We honor our partners' free choices and respect their legal right to affiliate."