Thursday, March 24, 2011

Boehner: Starbucks is a small business, proves health reform is a job-killer

Bet you didn't know this about what NASDAQ calls the world's largest coffee purveyor. It's a small business. Speaker John Boehner says so.
Boehner Starbucks tweet
Never mind that it has "17,009 (as of January 2, 2011)" stores worldwide. Or that it reported sales of $2.95 billion for the first quarter of 2011—the strongest quarter in the company’s history.
To be fair, and it's really hard to be fair to Boehner, he's getting this from Starbuck's CEO Howard Schultz, who now has a stranglehold on the market, so he's decided to be a Chamber of Commerce kind of guy. He says now that the Affordable Care Act is bad for small business, like he'd know. Apparently he's gone totally Chamber of Commerce, whose definition of a small business is questionable, at the very least.
What's particularly ironic in this is that one of the key things that Schultz used to convince customers that his company wasn't evil as it sought world-domination of coffee, was it's commitment to community. Here he is in a 2004 interview with Businessweek.
Q: What's the biggest challenge you face in terms of meeting your objectives for growth?
A: Without a doubt, it's health-care costs. We just had to raise our prices for the first time in four years....
The companies that are doing the right thing by covering their employees are paying for the companies who don't do the right thing. Starbucks provides health insurance for all employees working 20 hours a week and up.
Q: Why do you do that? Clearly you are putting yourself at a competitive disadvantage.
A: The value and guiding principles of the company are linked to how I grew up, in the Canarsie section of Brooklyn. We were working-class and lived in federally subsidized housing. My dad never made more than $20,000 a year. I saw the fracturing of the American dream. My parents didn't have much -- and they didn't have much hope. We didn't have health insurance.
And I saw up close the plight of a working-class family. Building Starbucks has been very much about building a company my father never got a chance to work for. The cultural transformation took place when we were small and still losing money, and we decided to provide comprehensive health insurance for every employee, and later stock options for every employee. That was a first for part-time workers. About 65% of our employees, then and now, are part-time.
Early on, we decided we wanted to build a different kind of company. A company that made a profit, built shareholder value, but had a social conscience integrated back into the company.
That "different kind of company" line was to help take the sting out of paying $5 for a cup of coffee—at least your money was supporting an ethical company.
The other irony in Schultz's new position? The Affordable Care Act will reduce costs for real small businesses who want to do the right thing and provide health insurance to employees by providing tax credits. That's already happening; there's been a "significant increase in small businesses offering health care benefits to their employees" since the law passed, because of these credits.
So what Schultz was complaining about in 2004 has been partly remedied now in the law he's now opposed to. So, basically, he's lying. And giving Boehner the opportunity to pick up that job-killing drum and keep on beating it.

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