Why Starbucks, Apple and Google are unionizing now for the first time

For decades, union membership has been on the decline. Yet in the last few months, workers have been organizing at a pace this country hasn’t seen since the Great Depression.

Amazon has captured headlines for union drives at its warehouses, including a successful effort on New York’s Staten Island. But activity is picking up elsewhere in retail and tech at big companies that are generally viewed as progressive, with no history of labor unions.

As of Wednesday, 209 Starbucks stores have officially voted to unionize according to the National Labor Relations Board. First-ever unions have also formed at an Apple store in Maryland, a Google Fiber contractor, REI, Trader Joe’s, Kickstarter and Activision Blizzard.

“There’s really no rational world in which the Amazon Labor Union or Starbucks Workers United should win,” said John Logan, a labor and employment studies professor at San Francisco State University. “And yet they did, and in the case of Starbucks Workers United, they won over and over and over again.”

The wave at Starbucks started in December with a store in Buffalo, New York, where workers voted 19 to eight to join the large, established Workers United union. In one example of the benefits a big union can bring, Workers United has created a $1 million fund to support Starbucks workers who lose wages as a result of organizing activities like striking.

The movement spread fast. Within six weeks, about 20 other stores filed for elections. Eight months later, about 45 elections have failed, and more than 200 of Starbucks’ 9,000 U.S. stores have unionized.

“A lot of it is concentrated amongst young workers, sometimes college-educated young workers, often working in sort of low-paying service sector jobs: overworked, underpaid, overeducated workers,” Logan said. He said their level of enthusiasm is causing a rush of panic elsewhere in the corporate world.

“The CEOs of all of these big companies are horrified by what happened at Starbucks and they’re thinking this is what we want to avoid at all costs,” Logan said.

CNBC talked to workers inside the unions forming at Starbucks and Apple about why the movements are gaining traction now. 

“It has to do with the pandemic,” said Laura Garza, a barista who helped organize her New York City-based Starbucks location, which voted to unionize in April. “It made a lot of workers that continued to work during the pandemic reevaluate what is most important to them. And honestly, it has to go to better pay, livable wage for everybody.”

In addition to the pandemic conditions, numerous other factors have collided to create what labor experts call a perfect storm for organizing. The U.S. has seen four decades of stagnant wages. Companies that already had healthy profits before the pandemic made even more money after lockdowns. And there are lots of jobs available without enough applicants to fill them. What’s more, the Biden administration is pro-union.

In May, Garza and organizers from Amazon and other companies were invited to the White House to discuss their efforts with Vice President Kamala Harris and Secretary of Labor Marty Walsh.

“They heard some of our stories of fierce anti-union busting, not only from Starbucks but from Amazon,” Garza said of her visit to the White House. “Secretary Walsh said in particular that Starbucks should just come to the table with its partners and work together to collaborate.”

Starbucks criticized the visit and requested its own White House meeting, which hasn’t happened.

The union movement at Apple stores is progressing at a slower pace. The first union win among Apple’s 270-plus U.S. stores happened on June 18, when workers in Towson, Maryland, voted 65 to 33 to join the International Association of Machinists and Aerospace Workers. No other stores have held a vote.

“Being part of a tech company this big, it’s very easy to be intimidated and come off as ungrateful, which is something that we want to make known: that we are not ungrateful,” said Tyra Reeder, a technical specialist at the Towson Apple store. “We’re doing this because we love our jobs. We’re doing this because we see longevity at Apple.”

Three other stores have taken steps to unionize, although one in Atlanta withdrew its election petition in May. That same month, a memo was leaked showing Apple’s anti-union talking points, instructing store managers to tell workers they could lose benefits and career opportunities if they organized. 

“Unfortunately, these union-busting campaigns do have an impact and they can scare people,” said Sara Steffens, secretary-treasurer of Communications Workers of America, which has about 700,000 members. “And so in Atlanta, the Apple workers decided not to try to go for an election right at this moment.”

CWA helped organize the Atlanta Apple store, as well as workers at Google. In March, Google Fiber contractors in Kansas City held an NLRB election, becoming the first to officially unionize under what’s known as the Alphabet Workers Union. Nearly 1,000 other Google workers have also signed cards to join the AWU, but because the employees haven’t officially held an NLRB election, their group is known as a minority union.

“There’s a lot of research that shows that most Americans want unions,” Steffens said. “They just don’t want to go through this scary union-busting process.”

About two-thirds of Americans now say they support unions, the highest approval rating since 1965. Yet actual participation remains at a multi-decade low, hovering at 10.3% of the workforce in 2021, down from 10.8% in 2020 and 20% in 1983, according to the Bureau of Labor Statistics. At its peak in 1954, union membership was close to 35%.

Although it’s too soon to know official figures for 2022, the first three quarters of the fiscal year — October 1, 2021 through June 30 — saw a 58% increase in official attempts to unionize and exceeded the total number of election petitions from the year before. 

In the months that typically pass between when workers file for an election and when they actually vote, big employers often spend millions of dollars on campaigns to dampen support for the union. Amazon, for example, spent $4.26 million on labor consultants in 2021. Both Apple and Starbucks have retained Littler Mendelson, the largest employer-side labor law firm in the country. That means they have similar talking points, often referring to the union as a third party, hungry for dues.

“Many people think, well, I don’t want to be paying $100 a month to a union,” said Diana Furchtgott-Roth, former chief economist for the U.S. Department of Labor. “That’s why union representation has steadily declined.”

In May, Apple raised the starting pay for retail workers from $20 to $22 an hour, a 45% jump from 2018. Unionized workers are asking for $26 to 28 an hour.

“I definitely think this was a tactic to kind of say, ‘Hey guys, here’s $2, please shut up,'” Reeder said.

Also in May, Apple’s head of retail and human relations, Deirdre O’Brien, put out a video to retail workers discouraging unionizing. She also visited the Towson store after it filed for a union election.

Reeder said she viewed O’Brien’s appearance as a “union-busting tactic or a scare tactic.”

“That’s not something that I’ve heard happening at our store ever,” Reeder said. “Somebody of that much stature unannounced, walking through our store after we do something like unionize.”

Apple declined to comment on the allegations, and told CNBC in a statement that it offers “very strong compensation and benefits for full-time and part-time employees, including health care, tuition reimbursement, new parental leave, paid family leave, annual stock grants and many other benefits.” 

At Starbucks, former CEO Howard Schultz came back to run the coffee chain in April and brought with him a history of union opposition. He spent his early weeks visiting multiple stores for “collaborative sessions” with baristas. Starbucks has said it plans to bargain in good faith.

A month after Schultz’s return, Workers United filed more than 250 unfair labor practice charges claiming Starbucks engaged in surveillance, fired workers and closed a store in Ithaca, New York, in retaliation for voting to unionize. Then in June, a federal judge in Arizona ruled in favor of Starbucks after three pro-union workers claimed they were wrongfully dismissed.

A Starbucks spokesperson told CNBC via email, “Claims of anti-union activity are categorically false. We respect our partners’ rights to organize and are following NLRB rules to ensure all partners are informed about the process.” 

Garza said in June that more than two months after her Starbucks Reserve location voted to unionize, that the mood was still “very tense,” and “a lot of partners still do not feel safe from being terminated, and that goes for myself.”

Starbucks is known for providing extensive health care benefits to part-time baristas, including coverage for some expensive treatments like in vitro fertilization that are often not covered at service jobs. In May, Starbucks announced wage raises and increased training, but only for stores that haven’t unionized.

Logan, the labor professor, said Starbucks’ reputation for being a progressive employer has helped fuel the union movement.

“They attract particular kinds of employees who share those progressive values, and often their customers share those progressive values,” he said. “So in a sense, Starbucks has hired exactly the type of employee that’s making the union drive so successful and so dynamic.” 

Garza called the company’s behavior “puzzling.”

“It’s very surprising that Starbucks is fighting this because the reason that we all joined Starbucks is because of its image as a progressive company,” she said.

Google has also been accused of fighting back. The NLRB found that the company “arguably violated” labor law when it fired employees for speaking up. The Google Fiber contractors faced additional anti-union messaging in a letter from the contractor, which said “everyone will be stuck with the union and forced to pay dues.”

Google told CNBC in a statement that employees are treated the same regardless of whether they’re in a union.

“Our employees have protected labor rights that we support and we’ve long had contracts with both union and non-union vendors,” the company said.

Workers in unions make on average 16.6% more than nonunion workers, amounting to almost $200 per week.

“If unions weren’t effective for workers, companies wouldn’t fight them so hard,” said Steffans of CWA. “They know that workers will make more money first and foremost when they organize and choose to join a union.”

However, there are better ways to get more money, according to Furchtgott-Roth, the former Labor Department economist.

“There are so many new jobs out there,” Furchtgott-Roth said. “My message is: There are people who would hire you on a different schedule and probably at a higher rate of pay.”

She also said the union model isn’t great for retail because the high turnover rates mean that people who never voted to organize “are going to be having the dues taken out of their paychecks.”

But workers are looking at how well their employers are performing and wondering why they’re not getting rewarded equally. For example, Google parent Alphabet recorded its fastest revenue growth rate since 2007 last year. Apple’s margin has been steadily rising and the company closed 2021 with its biggest quarter ever for sales, at almost $124 billion.

“I don’t think people realize how much money that is,” Reeder said. “I mean, for the amount of training we do and the amount of help that we provide and services that we provide customers, our current pay is not cutting it.”

In addition to higher pay, Apple store workers are asking for more time to spend with each customer and better opportunities for career advancement, like moving into corporate jobs.

“My job is not just being a technical specialist,” Reeder said. “I’m a marriage counselor. I’m a therapist. I’m a punching bag sometimes. We are the line of defense for Apple and even being technically retail, we’re very skilled workers. We go through a lot of training. Sometimes you just don’t feel as valued as we should.”

At Starbucks, unionized baristas want a boost to the current starting salary of $15 per hour, more staffing where it’s needed and more say over their schedules. They also want better benefits.

“We’re going to be asking for more comprehensive mental health benefits as well because working during a pandemic has been enormously stressful,” Garza said.

Whether the organizing momentum spreads more widely across the economy may depend on how vocal and successful workers are at Starbucks, Apple and elsewhere.

“I hope that we can be a resource and then motivation for these other stores to unionize,” Reeder said. “Stand your ground. Make your voice heard. Whether they want to listen or not, now they have to.”