Can 'Ethical' Companies Be Union-busters?

By Daniel Gross
Herald Tribune
April 8, 2007

NEW YORK: On March 30, the U.S. National Labor Relations Board's New York office delivered a stinging accusation against one of the most popular retail outlets in the United States. The labor board charged that Starbucks, the ubiquitous coffee chain, had committed 30 violations of law in trying to ward off union activity at four outlets in the New York borough of Manhattan.

This may be the latest salvo in a new kind of labor battle: union workers versus corporate do-gooders.

The allegations that Starbucks fired employees who were supportive of unionization and threatened to fire others seem to conflict with the culture of a company that wears its conscience on its recyclable coffee-cup sleeves.

"The NLRB's complaint illustrates that this is a company with a profound disrespect for workers' rights," said Daniel Gross (no relation to author), a union organizer who dished out frappuccinos and mocha lattes at Starbucks before being fired last August.

Gross and other union organizers are pushing Starbucks for higher wages and more hours, asserting that the $8.75 an hour that some New York coffee clerks, or baristas, earn is too little. They also want the company to guarantee a minimum of 25 or 30 hours of work a week for many of its employees.

Starbucks strongly denies the charges and says it will fight them in court. But Starbucks has not suffered anything like the fate of Wal-Mart, another national chain known for its opposition to unions. While Wal-Mart has been rebuffed in its efforts to enter the New York City market, Starbucks does not seem in danger of becoming a pariah.

Judging by the lines at Starbucks stores in Manhattan, one of the most progressive and union-friendly parts of the United States, the accusations of union-busting and poor pay may not matter a lot.

Activists are asking consumers to sign petitions and send e-mail messages protesting Starbucks' practices. But they may have a hard time matching the success of the campaign against Wal-Mart.

One could chalk it up to the nature of the product. Many customers feel they simply cannot get their day started without a caffeine-laden beverage. But some powerful, far-reaching trends - like consumers' viewing their spending choices as political expression - may also help explain why a company can maintain its progressive reputation while also bitterly fighting unions.

Benevolence is an important component of Starbucks' brand appeal. The company provides health care benefits and stock options to many part-time employees. It says it is committed to paying coffee growers in impoverished companies above-market prices for the beans.

And its chief executive, Howard Schultz, called for universal health care coverage long before it became popular for corporate chieftains to do so.

The same holds true at Whole Foods. Like Starbucks, the U.S. chain of organic foods supermarkets maintains what it calls socially responsible sourcing guidelines and supports alternative energy.

Again like Starbucks, it has a chief executive, John Mackey, who is hostile to organized labor. In 2003, he told Fortune magazine that unions are "highly unethical and self-interested." And, like Starbucks, Whole Foods suffers no apparent consumer sanction as a result of its position. Sales rose 12 percent in the first quarter.

Why? One explanation, of course, is that with each passing year, unions occupy a smaller space in the American culture. In 2006, according to the Bureau of Labor Statistics, a mere 12 percent of employed wage and salary workers were members of unions, down from 20.1 percent in 1983, and only 7.4 percent of private-sector employees were union members. As a result, very few of the people who pop into Starbucks each day for a jolt of energy are union members or related to union members.

A change in the nature of political activism may also explain the apparent contradiction. Activism is increasingly taking the form of consumption.

"People are interested in doing a little bit better by the planet while they're shopping," said Mark Whitaker, the former Newsweek editor who is publishing Sprig, a new Web site for environmentally conscious consumers.

To register concern about global warming, people can petition their government. Or they can pay above-market prices for prestigious products that reduce emissions and save energy: a hybrid economy car instead of a sport utility vehicle; compact fluorescent light bulbs instead of incandescents; wind energy instead of coal-fired electricity.

By the same token, many people are willing to pay a premium for Starbucks coffee and Whole Foods vegetables in part because the companies trumpet their "good corporate citizen" credentials. Whether the employees who sell them $4 cups of coffees and $7-a-pound, or $15.50-a-kilogram, heirloom tomatoes agree may not matter.