Starbucks commits to "national living wage" for all employees

LONDON (ShareCast) - (ShareCast News) - Starbucks (Swiss: SBUX.SW - news) has decided not to buck the trend and announced its promise to raise its average wage in the UK to just under £8 an hour from November, the Financial Times reported. It (Other OTC: ITGL - news) comes after Chancellor of the Exchequer George Osborne in the last Budget set a new "national living wage" of £7.20 an hour for over-25s But the Financial Times reported that the international coffee giant said it would pay that amount to all of its baristas regardless of age.

Baristas had previously been paid £6.77 an hour.

Pay rates for supervisors will move up from £8.20 per hour to move to £8.72, and there will be a "material" premium for workers in London.

The increases will take the average pay for Starbucks' 7,500 UK staff to £7.98 an hour in the UK stores operated by Starbucks directly.

Franchisees will have to decide whether to mirror the company policy.

"We believe in equal pay for equal work," Kris Engskov, the president of Starbucks in Europe, the Middle East and Africa, told the Financial Times.

He wouldn't go into details about how much the increases will cost the company, but was "supportive" of the government's goal for pay of £9.35 an hour by 2020.

"It is a big investment. I will not go into the financial numbers but this is about the competition.

"If you look, this is the most competitive retail market in the world and the most competitive coffee market in the world and it is increasingly difficult to find great people." Starbucks also said it would begin offering its staff interest-free loans in order to pay rent deposits after employees told the company the biggest issue facing them was housing.

The loans would be repayable over a 12-month period.