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Politics / Education

How Starbucks Could Really Change the World

by Erin Ann McBride | July 30 2014

Starbucks wants to change retail employment and the future of education.

On June 16th, Starbucks billionaire Howard Schultz announced that his company would pay for thousands of their workers to earn a bachelor’s degree through Arizona State University’s online degree program.

While other employers are complaining that raising the minimum wage and having to pay for health insurance will bankrupt their companies, Starbucks is changing the game. The company was already one of the first corporations to offer part-time employees health benefits, 401k and a stock equity reward program, and now it will offer the College Achievement Plan, to bridge the gap for employees with career ambitions.

The plan is available to any employee at Starbucks who works at least 20 hours per week. The program works by allowing juniors and seniors to enroll with an online educational program offered by ASU with a full tuition reimbursement from Starbucks. Those who enroll with ASU’s online programs as freshmen or sophomores will be eligible to apply for scholarships of up to $6,500. Employees will not be limited to particular majors or classes.

ASU’s online academic program is one of the nation’s most ambitious, with over 10,000 students and 40 majors. With online tuition typically totaling about $500 per credit, and 120 credits needed to graduate, Starbucks’ program could save students tens of thousands of dollars.

Sure the company will get tuition tax breaks, and score high on the great employers, and charitable giving scale. And it just might make paying $4 for a cup of coffee more palatable to customers. But Schultz says it’s not about any of those things. “I couldn’t care less about marketing. This is not about PR. This is about the future of our company doing what’s right for our people and also, sending a message to the country that we can’t build a great company and we can’t build a great enduring country if we’re constantly leaving people behind… From day one, we said, we’re gonna try to build a business that builds a fragile balance between profitability and social conscience.”

According to ASU President Michael Crow, students raised in high-income households are vastly more likely to finish college than those from low-income households, an imbalance due to worries about money. He believes the new Starbucks program would help offset this imbalance.

Secretary of Education Arne Duncan was present at the plan’s announcement in New York City to lend the Obama administration’s endorsement. “If you guys can lead by example, and I’m convinced you can, what does this mean for another 50, for another 100 or 150 companies across the country? What kind of example in leadership can Starbucks provide? Where are the other CEOs who have Howard’s heart and passion?” Duncan said.

The plan appears to have been formed with the expectation that employees will move on once they complete their degree. It’s normal employee turn-over, and typical for retail jobs. The employees will not be contracted in any way to stay with Starbucks upon graduation. But Schultz said he hopes employees will stay on and rise up through the company. Starbucks will provide working students with a dedicated enrollment coach, financial aid counselor and academic advisor to support them through graduation.

There is no doubt that this is a magnanimous gesture. Kudos to Starbucks for truly choosing to do something good. But it also begs the question, does every retail employee need a Bachelor’s degree? Do we need more bachelor degrees? Or do we need more skilled workers?

In May, Michigan Governor Rick Snyder said his state suffered from high unemployment (higher than the national average), and yet has 70,000 unfilled jobs, due to lack of skilled workers.  According to a report published jointly by Accenture and the Manufacturing Institute this month, half of U.S. companies plan to increase U.S.-based production by at least five percent in the next five years.

In other words, what the U.S. needs isn’t another co-ed with a marketing degree. It needs more skilled trades and technical programs.  If Starbucks really wants to make a difference, it will enroll employees in programs that teach them how to design and build those fancy espresso machines.

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