HR Strange But True!
September 16, 2005

The chairman of Starbucks Corp. says the Seattle-based coffeehouse giant will spend more on health insurance for its employees this year than on raw materials needed to brew its coffee.

Chairman Howard Schultz noted that his company, which provides healthcare coverage to employees who work at least 20 hours a week, has faced double-digit increases in insurance costs each of the last four years.

"It's completely non-sustainable," he said at a meeting in Washington, D.C., with Senator Patty Murray and Rep. Adam Smith, both Washington state Democrats.

Schultz said Starbucks expects to spend about $200 million this year for health care for its 80,000 U.S. employees--more than the total amount it spends on green coffee from Africa, Indonesia, and other countries, the Associated Press reports.

Starbucks has about 100,000 employees worldwide, Schultz said, including about 65 percent who work part-time. It's the generous benefits for those part-timers that makes Starbucks increasingly attractive to older workers, but the benefits are also a key reason for low employee turnover and high productivity, he said.

Schultz declined to endorse any specific legislation at the meeting, saying his goal was to raise awareness of the problem. But whatever solution is adopted, he said, "every single American needs to have access to health insurance--full-stop."

Source: Associated Press


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