Editorial: Starbucks provides private funds to fix a public issue

Along with the skills to make an iced caramel macchiato, there’s now another benefit now to working for Starbucks — a free college education.

The colossal coffee company recently announced that it will provide a free online college education to thousands of its workers through an online program with Arizona State University. Baristas with at least two years of college credit will have their tuition paid for in full by Starbucks and the company will pay a large portion of the cost for those with fewer credits.  To gain acceptance into the program, Starbucks employees must work at least 20 hours a week and have the grades and test scores to gain admission to Arizona State.

This news comes at a time when nearly 50 percent of college students in the United States fail to complete their degrees because of the high costs of education and lack of safety nets. According to the company’s employee surveys, 70 percent of Starbucks employees do not have a degree. Many of those employees want to earn a degree, have dropped out of college or are in school but find it difficult to keep up with finances and education.

Starbucks employee Tammie R. Lopez embodies these dismal numbers. 

“My dad lost his job during the recession in my first year of college and my parents were really struggling for money,” Lopez said in an interview with The New York Times. “They were on the verge of losing their home, so I stopped going to school so I could get a second job and help them.”

With the new program, Starbucks employees like Lopez now have the opportunity to finish school without being forced to drop out due to financial burdens.

The news is fantastic for both the employees and the Starbucks corporation.

Starbucks can expect to see a large financial return for investing in their employees. Basic economics tells us that investment in human capital through education will lead to an improvement in production, in both quality and quantity and will lead to higher rates of retention among employees.  

As Howard D. Schultz, Starbucks chairman and chief executive, said, “I believe it will lower attrition, it’ll increase performance, it’ll attract and retain better people.”

The new program will attract motivated employees to Starbucks and keep them engaged with the company that is actively increasing their well-being. According to Gallup, companies in the top quartile for engaged employees — employees who are involved, committed and enthusiastic about their jobs — compared with the bottom quartile had 22 percent higher profitability, 10 percent higher customer ratings, 28 percent less theft and 48 percent fewer safety incidents.

Starbucks definitely has profit motives in mind here, which is scary for some — like Sara Goldrick-Rab, a professor of educational policy studies and sociology at the University of Wisconsin-Madison. Goldrick-Rab referred to ASU Online and Starbucks as two businesses and said both “have gotten together and created a monopoly on college ventures for Starbucks employees.”

Goldrick-Rab is right that Starbucks employees will not exactly have the widest range of choices for a college degree, but what choice did they have before? The interest rates on student loans, the rising prices of tuition and the defunding of public education by many states has left many without any other choice but to join the workforce rather than get a college degree. So, even if Starbucks is doing this all for profit, the ends justify the means. More people will be able to gain the degrees needed to compete and move up in the workforce.

As Schultz said, “There’s no doubt, the inequality within the country has created a situation where many Americans are being left behind.”

So if the government isn’t going to alleviate the situation, why not Starbucks?