HOWARD SCHULTZ: Businesses must do more given the dysfunction in Washington
Starbucks (SBUX) executive chairman Howard Schultz isn’t waiting for the government to get its act together and pass reforms.
“I think it’s incumbent today given the polarization and some of the dysfunction in Washington and a lack of progress that businesses and business leaders do much more for the people they employ, [and] the communities they serve,” he told Yahoo Finance in a recent interview.
Currently, Schultz is among business leaders working to connect a huge segment of the population with their first jobs so they can access the “American dream.”
Unfortunately, the status of the American dream in the current environment is a “little blurry,” Schultz told Yahoo Finance in a recent interview.
“I think for the country to really succeed at the level that we all hope it will, opportunity has to be available to everyone, and we need to live in a more compassionate, more empathetic society,” he said. “And if we can restore that, I think the American dream will be alive and well and healthier than ever. I’m optimistic about the future of the country because I have great faith in the American people.”
Schultz, 64, stepped down as CEO of Starbucks in April and assumed the title of executive chairman. In this new role, Schultz is focusing his efforts toward the company’s social impact agenda.
Part of the company’s plan is to hire “opportunity youth,” young people between the ages of 16 and 24 who are not in school and not working. There are currently 4.9 million of these young people in the U.S. Many of them are minorities.
In 2015, Starbucks committed to hiring 10,000 of these young people as part of the 100,000 Opportunities Initiative, a coalition of companies dedicated to this cause. The coalition already surpassed its goal of hiring 100,000 by 2020 and is now pursuing a new goal of hiring 1 million by 2021. To date, Starbucks has employed 40,000 of them.
Schultz himself came from humble beginnings. He grew up in public housing in Brooklyn’s Canarsie neighborhood. In 1987, he purchased Starbucks, which at the time had a few stores, and grew it into the coffee behemoth it is today with more than 300,000 employees, known as “partners,” operating 25,000 stores in 75 countries. The company is well-known for its benefits package, which includes health insurance for both full-time and part-time employees, stock options, and college tuition.
There are a lot of job openings
At the moment, the overall unemployment rate in the U.S. is low at about 4.4%. However, there continue to be major gaps in other measures of the labor market.
“[There] are a lot of job openings across the country based on the fact that there aren’t workers who are skilled in those jobs that unfortunately are being vacant,” Schultz acknowledged.
“In this particular situation, we have almost five million kids who need a first opportunity,” Schultz said. “And if you think about America, the word that comes to mind is ‘opportunity’ is the aspiration, and I feel so strongly regardless of the color of your skin, most of these kids today that are here are African-American or Latino, regardless of your station in life, your sexual preference, your gender, that the opportunity should be there to create a first job for you.”
While there is certainly a gap between job skills and job openings, Schultz points to even bigger issues.
“[T]he more serious problem is we’ve got one of every six Americans that are food insecure at night. We have millions of Americans who are homeless, and we have five million kids, kids who are not at work and not in school.”
From Starbucks’ experience, Schultz said he’s learned that these young people are “fantastic workers.” He added that there’s a “flywheel effect” on the employment of these kids that’s seen in their self-esteem and their self-worth.
From his perspective, this is just the start. And so he challenges the business community to step up and bridge the gap as “polarization” and “dysfunction” keeps Washington stuck in political gridlock.
“I think we need to stand up and stand taller and get engaged in these problems in ways that perhaps generations ago we relied only on Washington to solve them,” he said. “We need to solve them.”
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.