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Howard Schultz's progressive policies at Starbucks a mixed bag for Democrats

Joe Williams

Former CEO Howard Schultz supported labor-friendly policies during his time at the helm of Starbucks, but the former head of the coffee chain who is weighing a presidential run as an independent candidate is finding himself at odds with a Democratic base that has embraced a more progressive stance on marque policy issues.

The 65-year old’s flirtation with a campaign immediately drew criticism from both sides of the political spectrum. President Trump tweeted that Schultz “doesn’t have the ‘guts’ to run for President,” while some Democrats expressed concern that the effort could sink the party’s chances to retake the White House since it could pull needed support among moderate voters.

“I don’t see white working-class men or women voting for a Jewish billionaire who is pro-choice and pro-gay marriage,” Peter Dreier, a politics professor at Occidental College, said in a FOX Business interview. “He is going to take votes away from Democrats who are socially liberal and economically moderate.”

While Schultz has said little on his policy platform should he run – even declining to comment on whether he would raise taxes, but noting that wealthy individuals like him should pay more – the initiatives he spearheaded during his tenure at Starbucks provide an early read on his stance on key concerns among Democrats and Republicans alike.

In some instances, the policies reflected enhanced benefits that favored workers and pushed competitors to step it up. But on other topics like health care, the coffee chain has long been a leader in corporate America on offering coverage for most employees, including part-timers.  And some initiatives -- like an effort to encourage more employees to start discussions with customers on race -- were viewed as too extreme.

“His ideas range from ‘Wow, that’s a progressive idea that actually works well in the business environment’ to absolutely crazy,” Paul Argenti, a professor at Dartmouth’s Tuck School of Business, said.

Health care

One area where Schultz is likely to draw a stark divide from Democratic candidates is the future of the U.S. health care system.

Alongside Sanders, Democratic 2020 hopefuls like Gillibrand and Sen. Elizabeth Warren of Massachusetts are backing so-called “Medicare for all,” or a system under which individuals of all ages would effectively be able to enroll in the federal program that currently provides health care to those over the age of 65.

Schultz drew criticism from top Democrats in 2018 for calling government-financed health care not “realistic” and urging the party to instead focus on fiscal responsibility. But despite the backlash, Starbucks under his leadership was one of the most progressive companies in providing insurance coverage to its workers. Schultz has openly discussed his family's struggle with health care while being raised in public housing projects.

Under Obamacare, all U.S. companies are required to provide health insurance to all employees who worked a minimum of 30 hours per week. Even before that law, Starbucks provided comprehensive insurance for those who worked more than 20 hours per week. The plan covers roughly 70 percent of premium costs and the entire price of preventative care, Schultz wrote in a 2013 blog.

Free (or debt-free) College Tuition

In 2015, Starbucks said it would cover the cost of a two-year online degree with Arizona State University for employees who work at least 20 hours per week, an initiative the coffee chain projected would cost $250 million and help more than 25,000 graduate in the next ten years.

Schultz called the policy a demonstration of the “conscience of the company” and its ability “to try to do everything we can to help our people get access to college.” 

Financial assistance for higher education has become more openly embraced by top Democrats.

Sen. Bernie Sanders of Vermont, an independent who caucuses with Democrats and challenged former Secretary of State Hillary Clinton for the party’s nomination in 2016, advocated for free tuition and introduced legislation projected to cost $70 billion a year to eliminate it at four-year colleges.

Meanwhile, Clinton supported a plan to make college “debt-free,” but stopped short of embracing entirely free tuition for all. Ahead of the 2020 elections, top Democratic candidates like Sen. Kamala Harris of California and Kirsten Gillibrand of New York are also embracing debt-free college.

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Minimum Wage

Starbucks in 2016 rose the base pay for all its U.S. employees by at least 5 percent. The exact amount was determined by “geographic and market factors,” Schultz wrote in a note to employees at the time.

The company also doubled the annual stock award for those workers that had been with the coffee chain for at least two years.

The shift came as the national Democrat party also embraced the issue and made support for a $15 minimum wage a part of its policy platform ahead of the 2016 presidential elections.

Schultz’s stance on the issue, however, is more nuanced.

Seattle, where Starbucks is headquartered, voted in 2014 to raise the minimum wage in the city to $15 per hour. When asked about the effort, Schultz noted that it would not significantly affect his company but could lead to “unintended job loss as a result of going that high.”

“I don’t want to say Starbucks could afford it,” he told a local radio station at the time. “Most companies, especially small- and mid-sized companies, would not be able to afford it,” he added.

FOX News Channel will host a town hall discussion with Howard Schultz in Kansas City on Thursday at 6:30 pm ET.

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