Starbucks hikes wages, will hit $15 an hour minimum by next summer

Starbucks announced Wednesday it will raise wages for its U.S. baristas at least twice in 2022, bringing its pay floor to $15 an hour by the summer.

The announcement comes as bars and restaurants struggle to find enough willing workers to staff their eateries as demand rebounds. Domino’s Pizza, McDonald’s, Chipotle Mexican Grill and Popeyes’ owner Restaurant Brands International said they faced labor challenges during the third quarter, putting pressure on their U.S. sales. Industry experts and economists have pointed to a number of factors that could explain the lack of workers, including concerns about Covid-19, child care difficulties and moving to jobs with higher pay, like an Amazon warehouse.

Starbucks is also facing an effort to unionize by a handful of Starbucks cafes in Buffalo, New York. Employees are seeking to form a union to address issues that include chronic understaffing.

Starbucks said it would give baristas who have worked at the coffee chain for at least two years a raise of up to 5% in late January. Employees with at least five years experience could receive a pay hike of up to 10%.

The company is planning a second pay hike for summer 2022, which will bring its average wage up to $17 an hour. Current average hourly pay is $14 an hour. The new pay floor will be $15, while employees in some markets can earn as much as $23 an hour.

The coffee chain last raised wages for its workers in December. At that time, CEO Kevin Johnson said the company would bring pay to $15 an hour over the next three years. With Wednesday’s announcement, that milestone will be reached earlier than planned.

In addition to raising pay, Starbucks said it will offer $200 referral bonuses and add recruiters across all U.S. markets. The company is also working on innovations to make the job easier for baristas.