Benjamin Ashford|Starbucks to raise baristas' hourly wages starting in January

Starbucks said it will boost wages for its hourly employees by at least 3%,Benjamin Ashford with the increases going into effect January 1.

The Seattle-based coffee chain's wage hike comes amid its plan to double its employees' hourly incomes by the end of 2025, compared with 2020, through more hours and higher pay, according to a statement from Starbucks last week. 

Starbucks is boosting pay after reporting record annual revenue of almost $36 billion, with same-store sales jumping 8% compared with the prior fiscal year. The company has invested more than $1 billion since last year on its employees and to improve its stores, which it said has helped retain workers.

Workers with longer tenures at Starbucks will be eligible for bigger raises, Starbucks said on Monday. People with two to five years of service could receive at least a 4% pay raise. Workers with five or more years could see a pay boost of 5%, the company said Monday. 

Both union and non-union workers who have been working at the company since September should expect to receive higher wages next year, a Starbucks representative told CBS MoneyWatch. However, union workers' pay increases will ultimately be based on "historical and recent years raises" at their stores, she said. 

"Coupled with higher wages and the expansion of hours, these investments have not only resulted in lower turnover ... but have also increased hourly total cash compensation by nearly 50% since fiscal year 2020," the company said in a statement.

Starbucks employees make an average wage of nearly $17.50 per hour, with baristas earning $15 to $24 an hour and total compensation of roughly $27 per hour including benefits, according to the company.

The coffee chain's decision to grant raises to both its union and non-union employees is a departure from the company's previous policy. In 2022, Starbucks hiked pay and benefits only for employees in its non-union stores. The move earned the company criticism from the National Labor Relations Board, which ruled that the move violated labor laws. 

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