Starbucks Boosting US Employee Wages As It Looks To Lure In New Workers Amid Intense Competition

Starbucks Corp. (NASDAQ: SBUX) said Wednesday it would raise wages and ensure that its workers in the U.S. earn at least $15 an hour by summer next year.

What Happened: Starbucks said that workers who have worked at the coffee chain for at least two years could get up to a 5% raise in late January, while employees with experience of at least five years could receive a pay hike of up to 10%.

The Seattle-based coffee chain also said that average wage for all its U.S. hourly workers would range between $15 and $23 an hour from summer 2022, averaging nearly $17 an hour.

In addition, Starbucks said it has extended its $200 referral bonuses to help attract new talent.

See Also: Starbucks' Earnings: A Preview

Why It Matters: Starbucks' move to raise wages comes as restaurants in the U.S. struggle to attract and retain enough workers to serve customers as demand rebounds amid the economic reopening.

Fast-food giant McDonald’s Corp. (NYSE: MCD) and Mexican food chain Chipotle Mexican Grill Inc. (NYSE: CMG) announced wage hikes for their employees in May this year.

Starbucks last raised wages for its U.S. employees by 10% or more in December 2020.

Joseph Brusuelas, chief economist for RSM US LLP, said earlier this month that the era of surplus U.S. labor is drawing to a close and a $15 minimum wage is becoming the new standard in the post-pandemic economy.

Price Action: Starbucks closed 1.25 lower in Wednesday’s trading at $113.51.

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