Wednesday, September 14, 2005

Coffee Klatch

You may have less-than-generous feelings toward the corporate coffee of Starbucks, but I've always held them in pretty high esteem as far as how they treat their employees and their customers. Here's a great example from today's Seattle Post-Intelligencer:

Starbucks Corp. will spend more on health insurance for its employees this year than on raw materials needed to brew its coffee, the company's chairman said Wednesday.

Howard Schultz, whose Seattle-based company provides health care coverage to employees who work at least 20 hours a week, said Starbucks has faced double-digit increases in insurance costs each of the last four years.

"It's completely non-sustainable," he said.
Schultz said Starbucks expects to spend about $200 million this year for health care for its 80,000 U.S. employees - more than the total amount it spends on green coffee from Africa, Indonesia and other countries.

Starbucks has about 100,000 employees worldwide, Schultz said, including about 65 percent who work part-time. Increasingly, the company is hiring older workers, who are attracted in large part by the company's generous benefits, he said.

Schultz said Starbucks' benefits policy is a key reason it has low employee turnover and high productivity.

He declined to endorse any specific legislation, saying his goal was to raise awareness of the problem. But whatever solution is adopted, he said, "Every single American needs to have access to health insurance - full-stop."

The good news is they're not shirking their responsibilities to their employees, unlike some companies that might be based out of Bentonville, Arkansas. The bad news is, the more health care costs spiral out of control, companies like Starbucks and CostCo may have to abandon this corporate social welfare--which would only increase the rolls of federal/state-financed programs like Medicare and Medicaid.


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