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The Daily Shame | July 28, 2014

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Starbucks employees to pay Starbucks’ tax bill

Starbucks employees to pay Starbucks’ tax bill

Many years ago, I worked for a French company run by a man who can only be described as a carpet salesman beyond his capabilities. We didn’t sell carpets. Anyway, the government at the time said “you shall only work 35 hours a week” thinking that if they did that, then employers would say “damnit, I’ll have to employ more people”.

But they didn’t. Carpet Guy said “bollocks to that” and increased everyone’s lunch breaks by 18 minutes, and allowed everyone to go home 8 minutes earlier, thus saving 26 minutes a day per employee, meeting the 35 hour law without having to employ more people. The workload, of course, remained the same.

You have to admit, it was pretty clever. You have to admire employers’ ability to get out of doing what’s expected of them, sometimes. Like Starbucks, for example, that “coffee” chain who claim to sell coffee, but in reality sell brown water filled with frothy milk. We all know that they’ve been lying about their tax liabilities – either to us or to their shareholders. Who knows. Probably us.

So yesterday they said “we hold our hands up! We’re going to pay our tax now! Please drink our brown water and milk concoctions. Please, don’t boycott us. We’re good people, we’re paying our tax bill.”

So, having sold £3.1bn of brown water with milk, they paid £8.6m in tax, but now they’re going to cough up a bit more. And where has this mysterious money come from? Oh yes, their employees.

Let’s see what Starbucks is cutting from their employee contracts so that they can pay this tax bill:

-       no cash incentive for becoming manager or partner of the year (instead you get a plaque)

-       no bonuses for women returning after they’ve had a baby (apparently it’s not a valued benefit!)

-       No more hampers to new mothers – instead they’ll get a card, a Starbucks baby grow and a bib (really?)

-       No congratulations cards on anniversary of first four years of service

-       Removal of three-month vesting period for life insurance cover

-       Removal of sick pay for the first day of illness (because you’re never sick, really, are you)

-       Removal of 30-minute paid lunch breaks (but we’re keeping the other 10-minute paid break)

-       Pay will be frozen for some employees

Now, we’ve all had shit employers over the years, but if you work for Starbucks, you have to think that you’ve got the world’s shittiest employer. Instead of paying their tax bill and admitting they’ve been cheating everyone for years, they’re “talking about paying their tax bill” and preparing for it by taking away sick pay, paid lunch breaks, and – erm – anniversary cards. Well, it all adds up. Like those minutes Carpet Guy stole from our day in France.

In a way, you have to admire their cheek, and their financial acumen. They’ll have sat around a board table looking at powerpoint charts going “how can we best leverage our internal assets in order to maintain a cost base that is predictable going forward?” at which point some Starbucks exec got his willy out and started fiddling with it because someone said the word “leverage”. And their FD said “well, if we take this away, take this away, and stop paying this, then we’ve got a cost-neutral event horizon which we can leverage in order to cost-transfer our liabilities with no internal liability situation.”

And everyone nodded, before heading to Costa for a cup of coffee.

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