Starbucks (SBUX) and Arizona State University are entering a first of its kind partnership that will allow many employees to get college degrees without going deep into debt or, in some cases paying any tuition at all.
The Starbucks College Achievement Plan will give full tuition reimbursement to employees working more than 20 hours a week if they enter ASU’s online program as juniors or seniors. Others will be able to apply for scholarships worth $6,500 on average if they enroll as freshmen or sophomores. ASU has promised that its advisors will help students apply for other need-based financial aid programs.
The tuition reimbursement program only applies to Starbucks workers at company-owned stores. Workers at licensed stores, such as the ones in grocery stores, aren't entitled to company benefits. Starbucks has roughly 8,100 company owned locations compared to 5,400 licensed stores.
Starbucks says its total financial commitment won’t be known until it sees how many employees sign up. A company spokeswoman says 70% of Starbucks’ employees are students or aspiring students.
“Starbucks is proving that if you do right by your employees they do right by you,” says Jonathan Hoenig of the Capitalistpig hedge fund. “Hats off to Starbucks for showing other companies how it’s done; not by exploiting workers but rewarding them with perks, advantages and compensation that keeps them there and keeps them working hard.”
Identifying the best workers
Starbucks says employees who accept the deal will face no obligation to repay the value of the scholarship or stay with the company. For public consumption at least Starbucks is simply trying to address an inequality that’s leaving many Americans behind. In a statement CEO Howard Schultz referred to the “fracturing of the American Dream” and inequality seemingly cementing itself in the country. “The question for all of us is, should we accept that or should we try and do something about it.”
Like all good philanthropic efforts conducted at a corporate level, this isn’t pure-play altruism. Cynics can dismiss this as a PR effort but the self-interest payback is much more constructive than that.
With this program Starbucks is identifying its best and most motivated workers in a way no review ever could. Anyone putting in 20 hours a week at Starbucks and looking for ways to get their college degree online is showing initiative and a willingness to work hard and think several steps ahead in terms of planning their lives.
Working on the front lines in customer service jobs is hard stuff. It’s not a career but a starting point. Starbucks College Achievement Plan is a way for the company to identify and attract entry level workers with managerial skills and motivation. If those workers get a degree and stay with Starbucks the company wins. If they use Starbucks for the degree and move on to bigger things the country wins.
In fact the only people who really lose on this news are those looking to paint all corporations as evil-doing exploiters of the masses.
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