Starbucks CEO Schultz: $15 Minimum Wage Would Be Hard For Small Businesses

Mar 19, 2014

Starbucks CEO Howard Schultz says a $15 per hour minimum wage in Seattle may not have such a big effect on his company, but he’s concerned it would hit small- and medium-sized businesses hard.

The issue of raising the minimum wage has dominated headlines in Seattle ever since Kshama Sawant, who has been pushing for the increase, won a city council seat last fall.

Executives of large corporations have been quiet about the idea, even as small business owners have started speaking out against it. Schultz says their concerns are valid.

“I wouldn’t want to see the unintended consequences of job loss as a result of going that high. That would not be the case at Starbucks, but I suspect that most companies, especially small- and mid-sized companies, would not be able to afford it,” Schultz said.

Studies have shown that minimum wage increases do not lead to significant job loss, though big wage hikes haven’t been well researched.

Schultz says Starbucks already starts employees above the minimum wage, and offers health insurance to part-timers who work at least 20 hours a week. Under the Affordable Care Act, companies are only required to offer health insurance to people who work 30 hours a week or more. Starbucks also offers benefits such as a 401(k) matching program and a stock reward program.

Sawant has proposed requiring large companies to start paying employees at least $15 per hour starting in January. But for small businesses and nonprofit groups, she proposes phasing in that higher wage over three years.