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Starbucks extends pay for all workers whether they show up or not until May 3

Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Julia La Roche discuss Starbucks’ latest decision to continue to offer all of its employees benefits amid the coronavirus outbreak.

Video Transcript

- Yeah, and Russia were close to a deal that would essentially end the price war on oil, Brian.

BRIAN SOZZI: All right, let's get right to our very own birthday girl, Julia La Roche. Happy birthday Julia. Good to see you this morning. And you have some news on Starbucks. Take it away.

JULIA LA ROCHE: Well thank you so much, Brian. And happy early birthday to you in just a couple days, fellow Aries. Yeah, that's right. So Starbucks, as we had reported earlier, was one of the first-- one of the earlier companies to come out with catastrophe pay and making it so that their workers would be paid whether or not they would show up to work or not. They were guaranteeing that pay.

And they have now increased that guarantee through May 3. That's an additional two weeks, I guess. Because it was going to go through April 21. But at this point, I think folks are expecting us to kind of do this work from home, social distancing for a lot longer than we had initially expected. So again, Starbucks taking care of its employees, whether or not they come to work or they stay home. They don't have to choose between their health. I think that's really, really important to emphasize.

Now, Starbucks, for employees who are going to work, they did sweeten their hourly pay by $3 per hour for each shift worked. And they are continuing to keep that higher wage through May 3, that date that I had just referenced about when they might re-evaluate these things. They did convert, back in March, to a to go model, meaning they are using their drive-throughs or their delivery offering. They have drive-throughs at about 60% of their store fleet in the US. They have about 15,000 stores across the US.

And again, as I mentioned, no one has to go to work. It's completely optional. CEO Kevin Johnson did write a letter earlier last month, talking about the first day when they transitioned to this, when they closed and suspended that access to inside their stores, that a lot of their employees did show up, that he was really inspired by that. He also has said that look, they want more businesses to do this. Not every decision is a financial decision.

A few other things that Starbucks is doing, they have been providing free coffee, a free coffee drink hot or cold, to anyone who is on the front lines. Whether you are a paramedic, a doctor, a nurse, someone working in the health care system or a nursing home, they are providing free coffee. They've been making deliveries to hospitals. They've been staying open in and around hospitals to make sure they are serving the folks on the front line who do need it.

They're also extending a benefit for their child care. Whether or not folks are at work or at home, they are still extending that benefit. Some recent benefits they've come up with, mental health care. That's a big thing that came out amid the virus as well.

They launched some mental health care benefits using Lyra Health. The CEO of that company, by the way, used to be an executive at Facebook. It's a platform to help folks get access to telehealth around mental health, because this is a huge issue. We're talking about isolation, a lot of mental health issues that are surfacing as well.

So here's another example of a company that's really stepping up during this outbreak. Brian.

BRIAN SOZZI: Yeah Julia. You do get the sense-- you cover Starbucks very closely-- they have been out in front of this, for the most part, to the extent they can be.

JULIA LA ROCHE: Yeah. You know what Brian, and this goes back to the roots of the company. Even before they went public, look at Howard Schultz, the founder did there, he made sure that their entire workforce, whether you're part time or full time, had comprehensive health care benefits. They may have been the first or one of the earliest companies to do that and kind of set the standard.

Also equity in the form of stock options and the benefits including college education, debt free education, those sorts of things. It's kind of been core to the company's culture.

And I got to go and give Kevin Johnson a lot of credit here, the CEO. Him coming out and saying, look, not every decision is a financial decision. You're talking about Starbucks, one of the biggest private employers in the US, a massive employer globally, kind of setting the tone for others to follow. And we are seeing more companies come out. Whether it's doing good things for their community, for their workforce, we're in the world of this theme of stakeholder capitalism.

You and I heard this talked about constantly at Davos. Now that it's being put to a real litmus test, I got to say, Starbucks is one of the ones leading the way.

ALEXIS CHRISTOFOROUS: also Julia, a number of companies seem to be stepping up to the plate here and sort of doing the right thing. You've got Airbnb saying they're going to have 100,000 first responders all over the world staying in host places for free. You've got Amazon hiring more workers. You've got Apple saying they're going to actually donate a few million dollars to the hardest hit area in Italy. Do you think that when all is said and done, people are going to remember the companies that did it right? And frankly, remember the companies that didn't?

JULIA LA ROCHE: I think that's 100% right. We had Mark Cuban, the owner of the Dallas Mavericks, the Shark Tank investor, very, very, well known, serial entrepreneur billionaire on our air, and we were talking about this exact issue. In the way you behave, the way you treat your employees in this, you're talking about being set up for the long term and folks wanting to do business with you or not wanting to do business with you.

I'll give a couple more shout outs. Walmart, for example. Brian, you know this really well. They've been leading the way doing a lot for their employees, including the catastrophe pay, implementing measures in their stores. Those cash bonuses, 550 million in cash bonuses.

Another company just came out today, Alexis. Goldman Sachs has launched their own stimulus package for small businesses. About 275 million that they'll be deploying. A lot of that, most of that, about 250 million, will go to small businesses in the form of loans. The other will go to kind of mission led-- I guess more like nonprofits or something within communities. But here's a bank, a huge bank, by the way, coming out with its own stimulus package.

You're seeing a lot of the private sector step up. Yes, we have this massive historic 2 trillion plus stimulus package. But a lot of companies have to come in and fill some of the gaps. And I think you're going to remember the ones that really did step up.

BRIAN SOZZI: All right, Julia.

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