Starbucks workers in Little Tokyo join push to unionize

LOS ANGELES (KABC) -- Starbucks workers rallied in Little Tokyo Tuesday in front of the first store in Los Angeles to file for a union election.

The coffee giant is seeing employees organize at its stores nationwide. Seventeen of the locations are in California, and the number is steadily growing.

The L.A. County Federation of Labor and activists were on hand to show support for the workers.

The unionization effort is a response to firings, cutting of hours and alleged harassment by Starbucks.

Starbucks' sales climbed to record levels in its fiscal second quarter, but its profits took a hit from climbing labor costs.

And those costs are set to grow even higher in the coming months as Starbucks introduces new pay raises and other benefits to improve its employee experience and head off a growing unionization movement.

The Seattle coffee company, which welcomed back former CEO Howard Schultz last month as its interim leader, said revenue rose 15% to a record $7.6 billion in its 13-week quarter, which ended April 3. That was in line with Wall Street's estimates, according to analysts polled by FactSet.

But net earnings rose just 2% to $674 million. Starbucks' adjusted earnings of 59 cents per share fell short of analysts' forecast of 60 cents.

Starbucks noted that it faced higher employment costs during the quarter. Last fall, the company announced a $1 billion investment in employee wages and benefits in an effort to lift U.S. workers' pay to at least $15 per hour by this summer.

On Tuesday, after a series of meetings with workers around the country, Schultz unveiled $200 million in additional investments in worker pay and training. That includes pay raises for employees who have been at the company for at least two years as well as a doubling in training time for new baristas and shift supervisors. Starbucks is also reintroducing a coffee mastery program for employees and considering other benefits like increased sick time.

But there's a catch: Workers who have voted to unionize or stores that have petitioned to hold a union election won't be eligible for those benefits. Instead, U.S. labor law requires stores to negotiate their own contracts with Starbucks.

As of Tuesday, workers at more than 250 U.S. stores had filed petitions with the National Labor Relations Board to hold union elections, labor organizers said. Fifty of those stores had voted to unionize with Workers United, a branch of the Service Employees International Union.

The Associated Press contributed to this report.

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