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Starbucks set to give raises to all of its U.S. store workers

A Starbucks drink waits for a customer in Seattle. (AP Photo/Ted S. Warren)

Starbucks said Monday that it is preparing to give pay increases of at least 5 percent to all of its U.S. store workers and managers, a move aimed at shoring up the coffee giant’s ability to attract and retain employees in a steadily improving labor market.

The planned raises were announced along with other efforts to hang onto workers, including a different approach to selecting health-care plans and a more relaxed dress code.

It’s the latest move by a restaurant chain that has sought to position itself as a pioneer on workplace issues: In 2014, Starbucks debuted a program in which it covers tuition for full-time and part-time workers to get a college degree online from Arizona State University. It held forums last year for workers to discuss diversity issues as a national debate raged about racism and policing. And yet it is also looking to fully remove the tarnish that came in 2014 when the New York Times profiled a Starbucks worker who was struggling to deal with its unpredictable work schedules. (The company overhauled its scheduling practices almost immediately after that story was published.)

In a letter to employees that the company published on its website, chief executive Howard Schultz said the latest pay raises were meant to “ensure Starbucks remains a retail employer of choice.” Beginning Oct. 3, all employees at its company-operated stores will see their base pay hiked by at least 5 percent. Some workers could see a larger increase, depending on “geographic and market factors.” Starbucks also said it was tweaking its stock options program, doubling the award that is given to workers who stay with the company for two full years.

The two changes in compensation mean employees will see raises between 5 and 15 percent, Starbucks said.

In the letter to employees, Schultz brought up the issue of scheduling, saying “our field leaders are committed to make every effort to help you meet your specific scheduling needs.” However, he did not specify whether any new policies or initiatives were being introduced to achieve that.

In addition to the pay hike, Starbucks said it will be introducing a new approach to health-care plans intended to allow workers to more easily compare plans. Schultz also promised to loosen the company’s dress code. The famous green apron isn’t going anywhere, but the plan is to allow for more “self-expression” with attire. The details of what exactly that means are to be revealed at an employee meeting later this month.

Starbucks’s move comes as a host of major retailers boost their compensation in order to win the talent wars. Walmart has recently implemented a two-step hike of its minimum wage that affected nearly 40 percent of its U.S. workforce. In April 2015, the retail giant hiked starting wages to at least $9 per hour. Earlier this year, that base notched up to $10 per hour. Like Starbucks, Walmart has introduced efforts to make its workers’ schedules more predictable. McDonald’s and Target also raised their minimum pay last year.