Starbucks — gulps away from equality
Why I left $SBUX: Geographic Pay Gaps & Knowing Your Worth
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My Personal Journey
[Skip to the Big Picture. If you read only part of this, please let it be the last part.]
When I got to year number 5 in my career, I had no idea what I wanted to do, other than just build cool things. At my crux, 8 years later, that’s still true. I’m an individual contributor at heart, but I’ve learned that I cannot do everything by myself, nor should I. The team is everything, and inspiring and educating others to buy into ideas or features I believe in is an imperative part of my own success, as well as the success of those around me.
At year 9, I knew I wanted to be passionate about the work I did, have a voice that mattered, the freedom and support to explore my ideas, and to work for a company that treated their employees as partners instead of resources, had honorable values, and a mission that I could personally invest in. I took a job at Blizzard, which at the time, believed would uphold those values. I left after a year.
I kept looking. Eventually, I reached out on Twitter indicating I was in the market. The wonderful Manager of the web team at Starbucks Technology, now Director of Engineering, reached out to me with an enthusiastic interest that included my experience in the industry and my own personal brand of unyielding verbosity and honesty in my tweets. Ultimately, we made my circumstances work and I became a Technical Lead at Starbucks working remotely out of the Saint Louis area of Missouri.
During my first days there, I made my impact apparent. I took ownership over my areas of responsibility, and areas outside of that scope. My passion is users, and that means everyone from engineering, to content creation, to retail partners, to customers.
I showed that passion leading and helping to catalyze changes big and small. I can carry the torch of a little Point of Sale printout bug or a big change in core legacy technology for a new platform experience with the same inferno.
I love the people I worked with, all wildly brilliant and talented in their own ways, and I felt my manager to be undoubtedly one of the bravest, most capable women in our industry: constantly a steward of her teams.
So how did we end up here, talking about why I left?
It all comes back to core values.
Anyone who tells you that everything about a corporation they work for is great is hiding something and not someone I’d trust.
Everyone has pain points or things they’d change about their jobs, especially when the volume of folks in that company’s web is so vast. Communication is hard enough without it involving building things that are meant to be capitalized.
In April of 2018, I brought Starbucks’ values into question when one of our retail partners called the police on two black men waiting for someone in one of our stores in Philadelphia.
I wrote this tweet prior to our closing our stores for racial bias training. We promised a day, we gave a part of one instead. I was disappointed, so it chipped away at my beliefs.
The following June, I had one of my passion-driven ideas to celebrate Pride on the web application. I built it. I waited for the “Yes” from whichever mythological being in the C-suite cloud could give the go-ahead. Then I waited for the “No”. Neither ever came, and the story sat in a blocked status as we enter spring of 2019, a year later. There is a pattern of avoidance far above my role and department. More of my faith in this company was chipped away.
One of the struggles of a technology company supporting a Progressive Web App and native applications is the delicate nature of celebrating both without treating one like a second class citizen, or to put some air of fear around job security. We struggled with this a lot.
Our company tried something radical in our tech space to bridge the gap between technology platforms, and in a lot of ways, it unified us. However, for web, we almost felt like the pronunciation of not being the main squeeze of Starbucks was inflamed.
Our manager worked incredibly hard to make sure that our feelings were heard, but at the end of my time, even her voice seemed to be muted far above where she could reach. Change did come in small bits, but it took a very long time. It still wasn’t enough, and our work wasn’t celebrated in the same way it was for the native teams. More pieces fell away, slowly, but surely over that year of radical change.
In November of 2018, 5% of our workforce was laid off. Being remote and with no one on my team laid off, I was shielded heavily from the mood at headquarters, but following the Q4 earnings report and record high SBUX share value, I felt betrayed by the news.
Q4 Consolidated Net Revenues Up 11% to Record $6.3 Billion
— Starbucks Coffee Company 2018 Fiscal Year End Press Release
Prior to this news, hundreds of our employees had been transferred to Nestle, and these layoffs were a huge weight on top of an already tempestuous, shaken feeling over the previous year’s organizational changes.
More of my heart in Starbucks was cracked. It was obvious to me that Starbucks’ main investment would be in shareholder value, not its communities, nor its people, the supposed “partners”.
My year end review was great. The best of my career.
I was told how valuable I was to the company, not just to my team and manager. Amidst my own imposter syndrome-induced self-doubt, I finally felt I deserved my role and any praise I received for the work I did.
My confidence soared, in spite of my growing disbelief in Starbucks as a corporation. I felt strongly that the best work I could do was still at Starbucks.
It’s important to consider that I am a woman before we come to the core of what led us to this conversation. It’s also important to consider where I am now, geographically, and where I’ve come from.
I am not a Computer Science graduate. I’m not even a graduate. Of anything. I dropped out of high school. I grew up poor, and even homeless at times, and my childhood was anything but happy. I let my own damage hurt the people around me, and I was self-destructive. I live in the Saint Louis area because it’s where my ex lives. Our custody agreement, because of my lack of initiative to ever enter into one when I took care of her by myself for 6 years, bars either of us from leaving with our child.
I was a stripper for a while, and I even made the mistake of getting into pornography with a coercive, obsessive producer where I was abused by him and his staff for their pleasure. (No, you can’t find this, and believe me, you don’t want to watch it. I still cannot even verbalize the things that were done to me without having a severe emotional breakdown.)
I have bipolar disorder and borderline personality disorder. I’ve had an eating disorder in some form since I was 11. To explain the cross of damage done to me and by me over my first 21 years of life would take an entire novel. So we’ll skip to the important context.
When I got pregnant with my amazing daughter, I had no job and no home. I didn’t even have a stable relationship with her father. I did not want to raise a copy of myself. I wanted my child to know love and stability, and to be proud of where she came from; to trust her mother implicitly. The only thing I had was my looks, my curiosity, my brain, and one childhood autodidactic skill: coding.
In May of 2007, I returned to live in my mother’s home in Seattle, Washington, and got my first job as an engineer. A Front-End engineer. The director of engineering said to his team, “She’sssssss… really good.” I was hired on the spot.
A few months later, I gave birth to my daughter and spent the first 11 days of her life with her father in a crappy motel hoping things would change. He left, and I went back to work.
I want to be clear that this first opportunity was a manifestation of luck. While I’ve worked really hard over the last 13 years to become a better engineer, everything I had prior was just out of an inherent inquisitive nature and good brain genes. What I didn’t realize at the time, was that my salary was a result of this opportunity being one of luck, and not one of experience and education of most of my peers.
The issue with this, was that when I found out my peers were making significantly more than I was, with annual additional bonuses, and I wasn’t, I started to look closely at how much more I was doing than most of them. I was writing ruby, which I learned on my own direction, when we needed that work to be done, I designed small features based on existing features when design was behind. I was a janitor for the legacy codebase when no one wanted to do the work. I constantly showed value that should have made up for my lack of experience and education.
I was never seen that way. Instead, it was constantly brought up that I was often in the office a little later than others and that I was tired all of the time. I had an infant. One that I spent only 2 weeks of postpartum time with, unpaid. I could barely pay my bills. Of course I was tired. Of course I was coming in a little late. I was also staying a little later than everyone else.
I quit and went solo for several years, working with some awesome people, and some not-so-awesome people. In 2011, all of the not-so-awesome people stopped paying me. Given that I was just a single mom with a pre-schooler, I had to do something. Luck and opportunity knocked again, and I got a job at Gannett, working on USA Today’s mobile website.
I struggled my first year there because of my bipolar disorder and having a small child alone, but that was mainly because I didn’t share with my team what I was going through. I got put on a PIP (Performance Improvement Plan), but with my manager I worked through admitting my issues and asking for his help on how to be successful and show my value while considering my mental health and single parenthood, too.
I improved and got a 4% raise and bonus, which was the most I could get in a PIP. The following years there I grew to be an asset to them, and everyone was understanding of everything when it came to my personal life and helped me be the best I could be. I got great raises those years, and bonuses too, even though our company was doing poorly financially. I learned to embrace my pain and communicate with those around me.
That being said, I was still trapped by my original base salary being significantly lower than my peers. At that point, I accepted that as being part of being a woman, mother, bi-polar, non-degree holding person in engineering.
I moved onto Blizzard out of my love of games and wanting my passion to be at the center of my career. I was still underpaid, but it was a given for the company.
Everyone took a pay cut to join Blizzard, and so did I.
Fast-forward to Starbucks x Cher. Starting out with a low salary, I made the mistake of revealing what I made and how much of an increase I expected for the promotion to lead. This is exactly what I was offered. I didn’t negotiate: it makes me nervous and anxious to talk about money at all, let alone feel I may lose an opportunity if I seem ungrateful for what they are willing to pay me.
I took what I was offered and never complained about it.
That is, until after the best review of my career at the end of 2018, when I got the worst raise I’ve ever received. A 3% raise for anyone is a joke. It’s a cost of living raise that may not even cover the actual increase in your cost of living. The latter was true for me.
The benefits at Starbucks are great, don’t get me wrong, but let’s be clear that not everyone can benefit from them. I paid for “partner + family” insurance, which subsidizes the cost for larger families. Our cost this year went way up, and my 3% raise barely covered that increase. I didn’t have the time to attend university, work full time, and raise a child, so the free education from ASU wasn’t something I could use.
My love for Starbucks became frozen and brittle, and with all the cracks, it started to break.
With this amazing manager, and my new-found confidence in knowing that I was valuable, and not being fairly paid based on that value, I went to my manager with my feelings about my paltry compensation package. I wanted desperately to salvage my relationship with Starbucks and stay.
She agreed, and she informed me that she had already been talking to partner resources about how low my salary was for my position prior to my coming to her. There were many tears, and when I say I’m grateful she did that on my behalf without my knowledge, it’s such an understatement. She’s fantastic, and one of the only reasons I held on as long as I did. (I loved my team.)
Unfortunately, I got information that, once again, I was significantly paid less than my peers, and many of them in levels lower than mine.
I was left feeling like I didn’t belong in the position I was in. That I wasn’t good enough, just a good enough deal.
I gathered data to support my ask for a raise and gave it to leadership, along with a passionate letter driving my points home.
They made the argument that the Saint Louis market is what drives my salary and that it is fair based on the market.
The Big Picture
In March of 2018, Starbucks announced to the world that they had reached gender and racial pay equality. People among Starbucks tech had certainly chattered a bit that as a retail company with a tech org, Starbucks wasn’t really competing very well with local tech companies on compensation packages. I heard many conversations that felt like they believed Starbucks could be more competitive in their offers, but it was worth staying because of the mission and values. When I learned that my salary was calculated based on the closest metro area’s market value, I was stunned that this was not revealed in Starbucks discussion of their calculations in pay equality:
Beginning with a company-wide compensation study in 2008, Starbucks has run regular checks on partner compensation to identify and address any gaps.
Starbucks pay equality for partners, March 21, 2018, Starbucks Coffee Company
When I started pointing out that there was a discrepancy between the cost of living in my geographic area to the market rates, the conversations fell silent. I asked for transparency around my pay, all factors that determined the pay range they found for me, and what my salary would be if I relocated to Seattle. Unsurprisingly, it was never given to me.
Forbes ran an article discussing the pay equality Starbucks announced, and had the following key takeaways from the process:
— Permanently stop asking about previous pay histories
— Remove any caps on promotional increases
— Be radically transparent about wages, including offering pay ranges if a candidate asks for it
— Have an accessible pay calculator with transparent standards and calculation methods
— Annually report out progress across the organization
— Maintain a policy of no retaliation or discrimination towards employees who talk about wages
— Proactively discuss unexplained differences in pay between women and men performing similar work when discrepancies are found
- Tanya Tarr, March 22, 2018, Forbes.com
In my discussions with Partner Resources, I told them that my feelings about my value to the company clashed dramatically with what I was told in my review and that I felt it was going to affect my performance. I felt like I was hired because I lived in a cheaper market.
This was further confirmed when I was told that Starbucks strategically opened the Tempe, Arizona office, and planned on opening another office in a lower-cost (which is, of course, also more diverse) market in the south to hire cheaper labor.
While I agree cost of living should be taken into account, and I understand the business side of these strategic moves, businesses that do this tend not to consider that they drive the cost of living up, but do not drive the market value of the labor force up at anywhere near the same rate. Instead, eventually, businesses start hiring from more expensive markets, and pay to move around the same fairly paid group of people deemed to be “top talent” because they’ve had the opportunity to work in markets with higher rates.
My salary was at a 21% deficit to the median for my position in Seattle, where Starbucks’ Headquarters is located. The taxes where I live in Missouri are 20% higher than in Seattle, so despite the lower cost of housing, this accumulates to only a 5% deficit in the cost of living. I’d gauge myself as the 75th percentile at least, based on the feedback from Starbucks. This put me in a 30% deficit to what I should be being paid to be on par with my peers at Starbucks, on my team.
My starting salary: $125,000 (Seattle equivalent $132,953)
After the “tax cut raise”: $128,000 (Seattle equivalent $136,074)
After the “annual raise”: $131,000 (Seattle equivalent $139,221)
After the “gender parity raise”: $137,000 (Seattle equivalent $145,524)
They were paying me at the high end (starting around the 75% of Saint Louis’ market band, and ending at the 99th percentile of the band), so after feedback from peers in the area, especially those at Starbucks, I found that my rate would have been at least $164,000 annually. So, I did the math and asked for $145,000, which was still less than I had been told I should be getting, even with the cost of living difference. They still said no.
Let’s take something serious into account: the market rate for engineers in Saint Louis has a 16% discrepancy, on average, to the cost of living.
In Saint Louis, the reported average hourly rate of a barista at Starbucks is $9/hour. The minimum wage is $8.60/hour. In Seattle, the minimum wage is $12/hour, while baristas report an average of $15/hour from the hometown staple coffee company. Again, a ~16% discrepancy between the living wage for a partner in Saint Louis versus a partner in Seattle.
The greater Saint Louis area has more than half of its children living in single-parent households (the vast majority of which are mother-only households), which is only tapered down from 63–70% in the poorest areas by the few wealthy areas, like in the CDP I am privileged enough to live in. In all of King County, Washington? 25%.
Seattle suffers from a similar issue that Saint Louis has… the city is getting richer, especially the wealthy and married, while the single mothers are getting poorer.
Of all earners, women with children and no partner continue to earn the least. And, as other family types see gains, income for single moms has flatlined since 2009. Between 2015 and 2016, single mothers’ earnings actually appear to have dipped. — David Kroman, June 2018
The national median income for a single person is $61,372, the median income for single mothers in the US is 43% lower and dropping.
The main issue here is that the discrepancy between market value and cost of living tends to drive engineers to live in very different types of places in those respective markets. In underpaid markets, engineers are driven into lower income areas, in overpaid markets, engineers are empowered by pay into nicer areas.
Children who grow up in poor households have access to the least-funded public educations, and the worst childcare options. Single mothers are often unable to seek a higher education because of either cost, or time investment, and 15% of them, like me, dropped out of high school. Whether that was because of abuse or they became mothers while in high school, understandably unable to handle the workload of being a solo parent and getting an education.
This means that women who grow up poor, live in impoverished metropolitan areas, end up single mothers, and have no high school diploma are the least likely to ever overcome their inherited poor class status, let alone to ever reach pay equality. Their children have a 96% chance to stay in that cycle, if not more, depending on other factors.
I’ll reiterate: I’m lucky to be where I am.
I am in the overwhelming minority of “success stories”, but still on the downside of gender pay equality. I was on food stamps until just a few years ago.
I don’t feel inspired. I don’t feel nurtured. I feel like the people carrying cups of Starbucks Joe around in my local neighborhoods don’t feel any positive ripple from the dozens of stores scattered throughout the Saint Louis area.
Jay Moldenhauer-Salazar, Starbucks’ former Senior VP of Human Resources, embodied this mission by bringing a college education in reach of everyone, no matter their location and financial status, for free. He truly believes that people are the precious assets and that we must invest in all of them.
Working remotely is currently one of the only accessible means of breaking out of the perpetual cycle of poverty and lack of opportunity.
Starbucks is not the only party guilty of perpetuating the cycle of poverty, and the geographic discrimination of poor people, especially for people of color and single mothers. The greater Saint Louis area is made up of nearly 50% black people, compared to only 8% in Seattle. It’s not a coincidence that black folks earn ~75% of what white folks earn nationally, and geographic areas with more people of color are on the downside of cost of living to market value discrepancies.
Starbucks doesn’t control the market rate alone, nor do they set the federal and state minimums. Every corporation and the government needs to be notably more responsible for lifting up our neighbors, instead of plowing through them with gentrification and leaving the poor to find a way to live amongst a rising economy while they flounder, barely surviving.
My problem with Starbucks, is not the fight I was having with them over my own wage discrepancy, but rather that I was having it at all.
Shouldn’t Starbucks be the company standing in strong dissension here with their claim that they “challenge the status quo”? Shouldn’t Starbucks be loud and transparent about giving everyone the opportunity to be paid fairly based on their value to the company, instead of their circumstances? Shouldn’t Starbucks be keenly aware of how the geographic mobility of any given person is heavily tied to their class status (which is unequivocally intertwined with race, gender, family type, and sexuality)? People who will not relocate tend to be tied to their location due to circumstances beyond their control, such as family type or class status.
This entire conversation is juxtaposed to Starbucks’ Core Values:
With our partners, our coffee and our customers at our core, we live these values:
- Creating a culture of warmth and belonging, where everyone is welcome.
- Delivering our very best in all we do, holding ourselves accountable for results.
- Acting with courage, challenging the status quo and finding new ways to grow our company and each other.
- Being present, connecting with transparency, dignity and respect.
We are performance driven, through the lens of humanity.
In the end, they met me on the low end of what I was seeking, but why? The day I got my raise, April 3rd, 2019 (back-dated to April 1st), was the day after Starbucks doubled-down on its message that it had reached gender pay parity in 2018. An audit forced them to adjust my pay by 5%, again, based on a band calculated on my market. When asked what my pay would be in Seattle, no answer was given. Nothing my manager, or even my director, stated about my value to the company and the cost of living made a single difference.
In discussions about my pay, I also revealed I was looking to for contract work to supplement my pay because as a single parent (who just had their health insurance costs doubled), it just wasn’t cutting it. I was informed that we were not allowed to utilize our skillset to seek additional sources of income without it being first vetted by HR. This is very much a non-starter in most cases for engineering, because you sign an NDA in the majority of work you do.
Once I realized the implications of the battle I was having with them, not just for me, but for everyone in my community, I knew I had to leave.
I am incredibly grateful that I found an opportunity that understood my perspective, and felt what I was asking was for was very fair. I’m now lifting up my community’s market rates, instead of ensuring they don’t move.
My call to action here is pretty simple: stop using current market rates in geographic areas alone to drive pay. It’s not much different than using someone’s pay history to determine their salary.
Consider how some markets are driven by low minimum wages, and how that distributes wealth among those markets.
Don’t let me be the only person in an undervalued market being empowered to put my daughter in a good school district. Let’s put money in every district.
Starbucks needs to set an example and do more to lift the communities they barge into. I could not continue to work for a company that has shown me numerous times over the past year that it cannot hold itself accountable to the mission and values it claims to honor above all else. When companies refuse to hold themselves accountable, we have to step in.
I hope that Starbucks can remember that it’s not about the coffee, but how to pour your heart into it. That onward should mean upwards: from the ground up for everyone, no matter where that ground lay.
xoxo,
Cher
If you’re looking to negotiate your salary, I highly recommend this podcast.
