The Business Ethics Blog

What do Starbucks and Walmart have in common? I mean, beyond being wildly successful chains. And beyond being corporations with a tendency to polarize commentators into Lovers and Haters. What, for example, do the two have in common in terms of labour relations?

The stopstarbucks.com website features an open letter to Starbucks CEO, Howard Schultz. It begins like this:

Dear Mr. Schultz (Starbucks CEO),

You have repeatedly intimidated and terminated your employees for seeking to unionize, taking a page from Wal-Mart’s unethical playbook. That does not foster trust among workers.

We insist you allow your workers to organize and stop opposing the Employee Free Choice Act.

Instead of allowing your workers to unionize and negotiate fairer wages, health benefits, and hours, Starbucks spends millions in legal fees settling labor complaints that would expose your atrocious labor practices. That does not foster trust among workers….

Here’s an example, from the NYT, of the kind of behaviour they’re talking about: Starbucks Loses Round in Battle Over Union. According to the story, Starbucks was found to have “illegally fired three baristas and otherwise violated federal labor laws.”

Now, union-busting is illegal, or at least certain union-busting activities are. But being anti-union in a more general sense is not. But is being anti-union unethical?

As a starting point, notice the comparison: the stopstarbucks.com website compares Starbucks to Walmart, a company widely criticized for its tough anti-union stance.

Now here’s the difference between Starbucks and Walmart: the customers. Walmart customers are, well, not wealthy. They’re primarily the working poor, the underemployed, and those on a fixed income. (In the US, Walmart customers have annual household incomes well below the national median.) Unionization at Walmart would mean higher wages, which would translate into higher prices, which would hurt Walmart’s not-very-wealthy customers. Resisting unionization is one of the ways Walmart keeps their prices low, to the benefit of many poor families. That doesn’t mean its OK to violate workers’ rights. But it explains why it’s not wrong for Walmart to resist unionization in general.

Now, consider Starbucks. Starbucks customers are, well, not poor. Not typically, anyway. Starbucks caters to those willing to pay $5 for a fancy cup of coffee. So Starbucks can’t exactly claim to be protecting its impoverished customers from greedy unions. But then, that doesn’t make it a slam-dunk, ethically, for the union side either. It’s still a zero-sum game, and a raise for employees means the price of a cup of coffee goes up. Well, prices don’t necessarily go up. Starbucks could, instead, cut how much it pays farmers for coffee beans and for milk. Or stop donating to charities. Again, the point here is not to justify union-busting: workers’ rights are important, and Starbucks has done some bad things in this regard. I’m just using this example to point out what ought to be obvious: that higher wages are not always, on balance, an obviously good thing, ethically speaking.

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HT to the Organic Consumers Association.