Labor Day Report: Tax-Fairness Group Contrasts Starbucks’ Anti-Union Tactics With Exploding Wealth Of Corporation And CEO Howard Schultz

August 31, 2022

WASHINGTON, D.C. – As the country prepares to celebrate its national holiday in honor of  working people this Labor Day, a new report from Americans for Tax Fairness contrasts the  super-sized gains in profitability and fortune of Starbucks and its billionaire CEO, Howard Shultz,  with the bareknuckle tactics they’re employing to fight their low-wage workers’ union  organizing efforts.  

The report, “Billion-Dollar Union Busters: Starbucks & Its Rich CEO Are Stifling Worker Organizing,” calls on Congress to pass legislation that would end the ability of Starbucks and  other corporations to write off union-busting expenses on their taxes, shifting the cost of their  dirty work to American taxpayers. The report also calls on Congress to enact tax reforms that  would leave corporations and their billionaire CEOs less money to pursue their anti-union  campaigns.  

Key findings of the report include: 

  • Schultz’s personal fortune increased by nearly $1 billion during the COVID pandemic,  leaping to nearly $4 billion today. Over the last decade his wealth has increased by  about $640,000 a day on average, or more money in a single day than most of his store  employees are likely to make from Starbucks in a lifetime. 
  • Starbucks’ effective federal income tax rate was slashed from 28% to 18% after it got a  massive corporate tax cut from President Trump and Congressional Republicans in 2017.  In 2020 and 2018, Starbucks only paid an effective federal tax rate of 5.8% and 3.3%,  respectively. 
  • Starbucks’ CEO compensation last year was almost 1,600 times more than the average  Starbucks employee, the 11th worst CEO-to-worker pay ratio among the S&P 500. Starbucks’ board of directors have essentially awarded themselves millions of dollars in  corporate stock and approved $12 billion in corporate stock buybacks in recent years,  mostly benefiting themselves and other wealthy shareholders. Meanwhile, Starbucks  workers saw their current median income of $12,400 rise by less than $300 last year, a  2.3% raise that failed to keep pace with the 5.8% inflation rate. 
  • Despite $4.1 billion in 2021 profits, Starbucks no-holds-barred efforts to prevent their  workers from organizing have included improperly firing leading organizers and  effectively “bribing” workers not to join unions. Legislation in Congress would end  taxpayer subsidies of the kind of union-busting efforts Starbucks is now pursuing. The  No Tax Breaks for Union Busting Act (S.4192 / H.R.8448) would prevent corporations  from deducting the cost of pressure tactics intended to dissuade their employees from  organizing for better pay and benefits, thus making union-busting more expensive for employers.

Corporations spend at least $340 million a year on anti-union activities, which they can write off  when calculating their taxes. These union-busting activities include pressure tactics, hiring anti union consultants, anti-union advertising, so-called “captive audience meetings,” and even  violations of the National Labor Relations Act.  

“The ruthless union-busting strategy used by Starbucks and its billionaire CEO is a perfect  example of how far wealthy corporations are willing to go to keep their profits concentrated in  just a few hands,” said ATF’s Zachary Tashman, the report’s principal author. “Congress should  pass the No Tax Breaks for Union Busting Act to end the public subsidizing of anti-worker  activities and require that corporations and their billionaire owners pay a fairer share of taxes,  leaving them with less money to interfere with the rights of workers.” 

“Working people built America. There would be no Starbucks without the thousands of  employees who show up to work, including during the pandemic,” said Rep. Donald Norcross  (D-NJ), House sponsor of the No Tax Breaks for Union Busting Act, which has 106 cosponsors.  “But our tax code favors corporate bosses at the expense of working people. Wealthy CEOs  shouldn’t be rewarded with American tax dollars for crushing their employees. We need to pass  bills like the No Tax Breaks for Union Busting Act to level the playing field for workers.”