At its annual shareholder meeting on Wednesday, Starbucks announced that it “has achieved 100 percent pay equity for women and men, and for people of all races, performing similar work in the United States” and expressed a commitment to closing its gender pay gap worldwide as well:
Announced today, Starbucks has committed to achieving and maintaining 100 percent gender pay equity for partners in all company-operated markets globally, setting a new bar for multinational companies. This is an effort supported by equal rights champion Billie Jean King and her Leadership Initiative (BJKLI) and leading national women’s organizations, the National Partnership for Women & Families and the American Association of University Women. …
Starbucks has also formulated Pay Equity Principles that led to the successful closure of the pay gap at Starbucks in the United States. Recognizing the importance of this issue for women all around the world, Starbucks is sharing these principles so other companies can follow suit, and address known systemic barriers to global pay equity.
A number of major US companies with multinational reach, including large financial institutions and tech companies, have recently released pay equity audits demonstrating gender and racial pay gaps of 1 percent or less in the US and committing to closing the small gaps that exist. These audits have come in response to pressure from the activist investor Arjuna Capital, which filed shareholder resolutions at a number of large companies requesting them. Arjuna had submitted such a proposal at Starbucks as well, but withdrew it last year after the coffee chain issued a report showing 99.7 percent pay equity between male and female employees performing similar work.
Despite assurances that these companies compensate employees equally for equal work, significant gender and race gaps remain in terms of advancement within the organization, with senior management still predominantly white and male while women and minorities are concentrated in lower-ranking roles. Starbucks’ diversity and inclusion report last year noted that among its 60 most senior leaders, 18 percent were minorities and 32 percent were women. These figures are fairly impressive, considering how many organizations have a severe lack of women and diverse talent in their upper echelons. By comparison, however, 43 percent of Starbucks’ total US employees were minorities and 66 percent were women.
Starbucks has also face investor pressure to provide more equitable benefits to its army of hourly store employees. In January, the company announced that it was introducing a new paid sick leave benefit and expanding parental leave for its hourly workforce, even though its existing benefit exceeded what most US retailers offer. This decision, which Starbucks said had been in the works for some time, came not long after activist investors began questioning why store employees did not receive the same parental leave benefits as corporate employees and raising concerns that this might constitute employment discrimination.