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labor Reformed Capitalism in Seattle; Baristas’ Unionism

Microsoft and Starbucks as exceptions to corporations’ union busting; Starbucks baristas as beacons of bottom-up organizing.

Franklin Heijnen

How are we to account for the fact that two of our nation’s leading corporations—first Microsoft, then Starbucks—have committed the ultimate heresy in American corporate capitalism by vowing not to oppose any efforts by their largely non-union employees to go union?

Is it geography? Both corporations are headquartered in metro Seattle. Then again, so is Amazon, which monitors its warehouse workers’ every twitch lest they seem even mildly inclined towards unionization. So it can’t be geography.

Is it CEO ethnicity? Both Microsoft’s CEO (Satya Nadella) and Starbucks’ (Laxman Narasimhan) are Indian-American. But the case that all prominent Indian-Americans have achieved socioeconomic enlightenment can be shot down with two words: Vivek Ramaswamy. So it can’t be ethnicity.

Let’s set speculation aside and get into the particulars. When Microsoft was seeking to purchase the gaming producer Activision, it encountered opposition from antitrust advocates. It also encountered a union, the Communications Workers of America (CWA) that was in the midst of waging a campaign to unionize Activision’s employees. Needing some progressive allies to counter the antitrusters, Microsoft agreed to recognize the CWA as Activision workers’ union. Then, largely at the behest of Microsoft President Brad Smith, it extended that policy—not opposing unionization efforts and recognizing the union if the employees chose to go that way—to all of Microsoft, which employs about one hundred times the number of workers that Activision does.

To be sure, Microsoft employees haven’t appeared to be nest of labor militants. But looking to the future, Microsoft executives have to be conscious of the pro-union sentiments of young workers in general and young math-whizzes in particular. Over the past 18 months, the grad student teaching and research assistants at both MIT and Cal Tech have voted overwhelmingly to unionize. A harsh anti-union policy might deter some of the best upcoming talent from coming. A union’s-fine-with-us policy, by contrast, might just help attract the next Bill Gates.

The turnabout at Starbucks is much the more remarkable, as the company has spent the last two-and-a-half years employing intimidating baristas, employing union-busting attorneys, and refusing to bargain with any of the roughly 400 outlets that have voted to go union. One factor in the turnabout, surely, is the retirement last year of company’s founder Howard Schultz as CEO. Schultz clearly thought unionization was an affront to his legacy of establishing what he (and not just he) viewed as a model company. He viewed the unionized baristas as ingrates and insurrectionists. His successor, Narasimhan, apparently harbored far fewer such sentiments. And he was doubtless aware of the pounding Starbucks was taking in the court of public opinion, and that a high-powered slate of pro-union eminences (including former National Labor Relations Chair Wilma Liebman) were running for seats on Starbucks’ board at the company’s yearly shareholder meeting later this month.

The deal Starbucks jointly announced with the baristas’ union (Workers United, which is part of SEIU) went beyond mere pledges of neutrality when its workers sought to join the union. It included a commitment to negotiate a national master contract that would set wages, benefits and working conditions for all members of the union, augmented when necessary by supplemental contracts covering issues, if any, at particular outlets. And to make clear that its days of union busting were over, it agreed to give the baristas at the outlets that had voted to go union the raises it had denied them (while giving them to all non-union baristas), as well as back pay covering the time when they would have been paid at the higher rate.

A truth not often heard in American C-suites is that unions can provide certain benefits to a company. A contract tends to stabilize the workforce, cutting expensive employee turnover. In the case of Starbucks, a master contract saves it the tremendous hassle and cost of negotiating potentially thousands of individual contracts for each store, as well as nice branding boost for its liberal customers.

To date, workers at the 400 outlets that have gone union comprise just a fraction of the workforce at the roughly 9,700 outlets that the company owns in the U.S. (Another 7,000 U.S. outlets are owned by franchisers.) Inasmuch as a national contract, with what’s sure to be specified wage increases, more benefits and such, will apply to any workers at the other 9,300 company-owned outlets if they vote to go union, it’s reasonable to assume that many thousands of them across the entire chain will vote to join the union, too. (Call it a chain reaction.)

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So herewith, some speculative numerology. The union now claims to have roughly 10,000 members at its 400 unionized outlets. Even if that estimate is high, as I suspect it is, it’s certainly possible that once there’s a contract, the number of union baristas will rise to, say, 200,000, and possibly more.

Workers at franchise-owned Starbucks will surely compare their pay and benefits to those at the Starbucks-owned outlets and pressure their owners to offer comparable compensation, likely threatening to take their Starbucks-specific skills to the unionized outlets that the company owns. So who knows how far the union can roll this on? A decade ago, SEIU waged a campaign to unionize McDonalds, which failed to overcome the company’s opposition and to rally a sufficient number of workers. Given the threadbare status of labor law’s protections for unionizing workers, McDonalds could wield the threat of firing to union activists. Then again, so could Starbucks, which did in fact fire some activists over the past couple of years. Moving on to other fast-food behemoths would still be very daunting, but a smidgen less so in the wake of Starbucks’ about-face.

Moreover, a national contract between Starbucks and the union would prod workers at non-union facilities to join up not just in California and New York. but also across the non-union South. As of 2021,

there were 1,215 Starbucks in Texas, 786 in Florida, and 207 in South Carolina, which, in keeping with its heritage as the most militantly pro-slavery state in antebellum America, has long had the lowest rate of unionization of any of the states. In all likelihood, at least half of those Starbucks are owned by the company, which means there’d be a multitude of little unionized nests and young pro-union workers to vex the likes of Greg Abbott, Ron DeSantis, and Nikki Haley.

But just as Microsoft and Starbucks are exceptions to the rule in corporate America, so the baristas’ union is an exception to the rule in the American labor movement. Its victory alone makes it exceptional; no union has successfully organized a major group of private-sector workers (save only such workers with highly specialized skills as teachers at private colleges, who can’t be credibly threatened with firing for lack of ready replacements) in many decades. The last such unionization may have been SEIU’s unionization of janitors in downtown office buildings in the 1990s, but that campaign relied not only on mobilizing janitors, but also on pressuring the institutional owners of those buildings, and mounting support for the janitors’ cause among local elected officials and publics.

The Starbucks campaign was overwhelmingly barista-initiated and run, which makes it as much as unicorn among unions as Microsoft and Starbucks are among corporations. Once the workers at a Starbucks outlet in Buffalo became the first to go union, they were inundated with requests from fellow baristas across the nation as to how they did it. The lessons spread from Starbucks to Starbucks, with some of the baristas working as parttime itinerant organizers. Even a union as massive as SEIU has nowhere near enough organizers to cover hundreds, much less thousands, of outlets. Only the baristas themselves could do that. Their union, Workers United, was a smallish survivor of the old garment and clothing workers unions, which could boast storied and historic pasts, but a very scaled-down present. Nonetheless, Workers United did provide the baristas with one organizing doyen, Richard Bensinger, as a kind of senior counselor and mentor, and a campaign director, Daisy Pitkin, who is not only an accomplished organizer but also a compelling writer about the challenges organizers face.

That said, this was an unusually worker-driven campaign. As a reflection of that, baristas at the unionized outlets are now electing their representatives who will draft the union’s demands when bargaining for the national contract commences, and who will sit at the table (accompanied, of course, by their lawyers and union negotiating experts) to do the actual bargaining. That, too, is as much an exception as a rule in American labor today.

Workers United has been a division of SEIU since 2009. Its victory at Starbucks comes as SEIU’s president for the past 14 years, Mary Kay Henry, plans to step down at the union’s convention this summer. During her years at the union’s helm, SEIU has been one of the few unions to have seen substantial growth, though most of that growth has come through its political power, as when California’s government gave collective bargaining rights to publicly-paid childcare workers.

The victory at Starbucks is the result of a very different model of growth, and yet, it’s a fitting capstone to Henry’s career. Against considerable internal opposition, Henry launched and persisted in the union’s Fight for 15 campaign to win wage increases and union status for fast-food workers. Given the overwhelming difficulties in unionizing any of the tens of millions of American workers who fall between the many cracks in labor law’s protections for employees, SEIU’s campaign failed to unionize any fast-food workers, but its political savvy and clout did lead many states and cities to raise their minimum wage levels. Henry’s determination to keep investing in that campaign, then, brought SEIU no new dues-paying members (hence the internal criticism), but it still brought pay increases to millions of low-wage workers. Now, as she prepares to leave, some gutsy baristas, many of whom Starbucks assailed and some of whom it fired, will become SEIU members after all. And who knows what gains in worker power their victory may be incubating?