Transcript for Baristas' College Bargain: Starbucks to Pay for Education
Hello and welcome to real -- with RJ I'm Rebecca Jarvis and today we're taking a special look at Starbucks the company doing something that very few other companies in America. Have done going places where few other companies have gotten the CEO. Howard Schultz rolling out a new program for many of its 135000. US employees offering to pay. For their college education here is my conversation with him. College education why now no other retailers are doing this. I think this is an historic moment for our company is no doubt. That in the last few years there's been -- fracturing. Of the American dream so many people being left behind. And specifically when you look at the debt of college students over billion dollars the rising cost of college tuition. We felt strongly that this was an opportunity to really -- -- people we reckons. That this is most important thing in your life and we are going to pay tuition free for your college education. You -- 35000. Employees here in the United States. How many that he thinks take advantage as we know from our survey that 70% of them did not have a college degree we also know that of all the things -- that's. What benefits can we provided this is the number one benefit that they -- I think thousands of students will sign up. We're gonna do everything we can -- -- or making a significant investment our people. We have demonstrated over many years that shareholder value is linked to value for -- people with -- first company Americans buy health insurance and equity part time people. And this is probably the most historic thing we've ever done. In recognizing that you just can't build a great enduring company and leave your people behind so let's say. Everybody takes advantage of this what is it going to cost you this is going to be an investment millions of dollars -- -- people. But we have factored that in -- how many people if they are going to take advantage -- -- -- overtime. -- they'll -- Thousands of people let me put it this way. We've demonstrated over 22 years as a public company with significant shareholder value and performance. That the only way you could build long term value for -- Shareholder is to tie it to you people it's not how much we spend. It is the investment that's right for our company our people and we also think this is the right thing for America. We can't look in America with the inequities that we have and continues to turn our back and be a bystander we also can't continue to wait for Washington. Businesses and business leaders must recognize -- would we need you must do more for our people and the communities we serve. Considering that you are one of the very few retailers is making this -- Are you saying that other businesses are not treating -- -- properly. No I'm not I'm not here to preach to any other company or to criticize any other company. What I'm saying is Starbucks been a public company appointees. -- we've had the best performance of any stock -- any company in our sector. It's not because. We are only looking at children values because you're looking at our people and I think if you look at the history of great companies in America. Those companies look at their people as -- primary opportunity to invest in. There is no better time and no more important issue investing in human capital in America today. And this is an opportunity I think to recognize -- that college education. And the debt level and the cost of college and this is something that we must do. And coming to a point where we're able to do something disrupted -- -- and has not been done before take the road less traveled and stop complaining. And pointing fingers and finally saying we're going to be something about it. This is what this -- of. Pay employees more and tell them you know what if you want to put that money towards a college education. Go for it. Well you know we we pay about minimum wage and every place that we do business and we've always believed in total. Health care equity. And when our employees tell us the number one benefit that they want for the company and they don't have access to themselves is a college education we're stepping up. And saying we're gonna do it with you and for you. And I think this is the reason you can't build a great company but just focusing on the bottom line and making money. You can only build a great company but bring -- people long term. The minimum wage debate yes has been a very active one especially of late in the United States and a lot of people. And a lot of businesses have made the argument that raising that minimum wage for example doubling the minimum wage what it. Cost the consumer -- it would cost us jobs you'll agree. -- think it's a matter of degree as I said earlier we have always paid above minimum wage in every state we do business. I have been a supporter of raising the minimum wage the question is how -- ago. I think if people take it too far he'll be unintended consequences specifically for small businesses and it could potentially. Affect employment. I'm not Smart enough to know what the number is but I am supported -- raising imminently. It that went to fifteen dollars -- -- there's been a movement it doubly so -- went to fifteen dollars across the country. What that raise prices at Starbucks which you have to let people -- We would never let people -- because of the raise in minimum wage I do feel that if you talk to businesses across the country. There has to be some inflationary rate in terms of what consumers are gonna spend product. Something has to -- and I think these -- the kind of unintended consequences. That lawmakers probably are not fully understand. It's one thing to raise the minimum wage and -- -- what is going to be the costs and consumers but my primary concern is if the minimum wage it's too high. -- the negative adverse effect on small businesses small businesses yes you're going to Washington DC on Wednesday yes. What -- what anybody to speak out. What we're gonna share. What it is we're doing we've been invited to speak there and I think. Legislators in Washington very curious about this this is something that's never been done before and also I've been a proponent in the last couple of years. My concern about the dysfunction Washington. This is an opportunity to us sit and talk to them about what's necessary. And obviously we want them to understand what Starbucks is doing is not. Other companies follow and if you take -- back to their local constituencies. Many other companies will follow its example I think there will be other companies that will follow and I got calls this morning -- this thing was struck. Come out from friends of mine who runs. I know I can't take it. But I think they'll be other interested parties and we will be very transparent and how we're doing is why we're doing it. And we will share all the information in the hope that other companies will follow at Starbucks. You have -- -- -- this past. I think too great retail companies that do great things for their people or Costco and whole foods and it's not a surprise those companies -- to us. -- -- -- It's going up. Well you know I I think coffee's been very volatile because of the potential of an issue in Brazil. We're very mindful of that -- watching very closely and were concerned but. The cost of coffee generally is in low cost. Given all the other expenses we have a Starbucks and we have navigated through forty plus years. A volatile cyclical changes in coffee I'm very optimistic about about Starbucks ability. To maintain our guidance and achieve what we've always achieved in terms of -- your value despite the cost. So that meant the -- -- day that I enjoyed so much this morning. Prices going to be remains that I hope yeah.
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