Javanomics 101: Today's Coffee Is Tomorrow's Debt
Saturday, June 18, 2005
SEATTLE -- At a Starbucks across the street from Seattle University School of Law, Kirsten Daniels crams for the bar exam. She's armed with color-coded pens, a don't-mess-with-me crease in her brow and what she calls "my comfort latte."
She just graduated summa cum laude , after three years of legal training that left her $115,000 in debt. Part of that debt, which she will take a decade to repay with interest, was run up at Starbucks, where she buys her lattes.
The habit costs her nearly $3 a day, and it's one that her law school says she and legions like her cannot afford.
It borders on apostasy in this caffeine-driven town (home to more coffee shops per capita than any major U.S. city, as well as Starbucks corporate headquarters), but the law school is aggressively challenging the drinking habits of students such as Daniels.
"A latte a day on borrowed money? It's crazy," said Erika Lim, director of career services at the law school.
To quantify the craziness, Lim distributes coffee-consumption charts. One shows that a five-day-a-week $3 latte habit on borrowed money can cost $4,154, when repaid over 10 years. She also directs students to a Web site she helped create. The "Stop Buying Expensive Coffee and Save Calculator" ( http:/
Inside the Starbucks across from the law school, Daniels seemed surprised -- but unmoved -- to hear all this. "I guess I never had done the math," she said. "On the other hand, I would be a very crabby person without my comfort latte."
Therein lies the rub for those who would curb latte consumption with pocketbook reasoning. As Lim concedes, "no one pays any attention."
Financial planners, best-selling investment gurus and a number of advice columnists have been warning consumers for years that seemingly insignificant daily spending on such luxuries as gourmet coffee can, over time, sabotage savings and hobble a person's financial future.
But these warnings, too, have been ignored, at least as measured by the runaway growth and profitability of Starbucks, the world's leading purveyor of specialty coffee. Its stock is up more than 1,200 percent in the past 10 years. When it went public in 1992, the company had 125 stores. It now has more than 9,000 locations around the world and long-term plans for 20,000 more.
Starbucks declined to comment for this article, referring questions to the Specialty Coffee Association of America, a trade group. Its spokesman, Mike Ferguson, said that coffee shops provide an excellent opportunity for students to do their homework.
"You can occupy a table for two hours for about $3, which is unique in a retail setting," he said. "At a traditional restaurant, they will kick you out."