Starbucks to raise pay for US retail workers by 3% next year

Starbucks will raise the hourly pay of U.S. retail employees by 3% at the outset of next year, the company announced on Monday.

The Seattle-based coffee chain operates roughly 17,000 stores in the U.S., providing employees between $15 to $24 per hour in wages and a full benefits package that reaches as much as $27 an hour, Starbucks said.

Starting on Jan. 1, hourly retail employees will receive a raise of at least 3%. Further, workers with two to five years of employment at the company will gain a 4% raise and those with more than five years of experience will earn at least a 5% raise, the company said.

"Investing in our partners is what drives our success," Sara Trilling, executive vice president and president of Starbucks North America, said in a statement on Monday. "It's what makes us all partners. And an important way we do this is by investing in our partners' journey, to bridge to a better future at Starbucks and beyond."

In addition to the pay increase, Starbucks will reduce the minimum number of days an employee must work in order to qualify for paid vacation benefits, the company said.

The minimum pay raise of 3% falls short of the annual pace of inflation, which stands at 3.7%.

The announcement arrives amid an ongoing union campaign at Starbucks stores nationwide. Since 2021, a union called Starbucks Workers United has organized more than 350 stores employing roughly 9,000 workers.

Alex Yeager, a worker at a Starbucks store in Albany, New York, who belongs to the union, said in a statement to ABC News that he expects the company to provide the raises to nonunion stores only.

"Once again, Starbucks is responding to our bargaining demands, but they're implementing them in nonunion stores and denying these new benefits to workers in stores that are unionizing or already voted to join the union," Yeager said, noting that the union has filed charges with the federal government over previous instances of such conduct by the company.

"This is against the law, and there are already several consolidated charges from the National Labor Relations Board for benefit packages Starbucks has denied union workers -- such as credit card tipping -- since we started our campaign," Yeager added.

A labor board judge ruled in September that Starbucks had illegally provided previous pay increases and benefits to nonunion employees without offering them to unionized workers. Bloomberg first reported on the ruling.

In a statement to ABC News, Starbucks rebuked the union's allegation that the raises would only be provided to workers at non-union stores.

"All union-represented stores will receive annual wage increases consistent with our practice of providing yearly wage increases," the company said. "Wherever we can quickly and broadly improve partner benefits and perks we have and always will.

"Starbucks has adhered to long-standing legal obligations, which require the company to differentiate between unionized or organizing partners and partners in all other stores," Starbucks added.

In recent months, Starbucks and the union have publicly clashed over a host of issues, including the Israel-Hamas war.

The company sued Starbucks Workers United last month after the labor organization posted a since-deleted message on X, formerly known as Twitter, expressing solidarity with Palestinians. The message from the union triggered calls to boycott Starbucks, when some appeared to mistake the union's position for that of the company.

Weeks later, the union posted an additional statement on X standing with Palestinians while condemning the deaths of innocent civilians.

"We are opposed to violence, and each death occurring as the result of violence is a tragedy," the statement said. "We absolutely condemn antisemitism and Islamophobia."

The union also filed a countersuit against Starbucks, calling its lawsuit an attempt to damage the union and undermine its organizing efforts.

"We strongly disagree with the views expressed by Workers United, including its local affiliates, union organizers and those who identify as members of 'Starbucks Workers United' -- none of these groups speak for Starbucks Coffee Company and do not represent our company's views, positions, or beliefs," Sara Kelly, executive vice president and chief partner officer at Starbucks, said in the statement.