How Starbucks is working to close global gender pay gap
Kevin Johnson, chief executive officer, will announce that China and Canada are the first international markets to verify they have also reached that milestone for gender equity in pay.
Last year, Starbucks announced it had reached 100 percent pay equity for men and women and people of all races in the U.S. – and committed to working toward gender pay equity around the world. On Wednesday, Kevin Johnson, chief executive officer, will announce that China and Canada are the first international markets to verify they have also reached that milestone for gender equity in pay.
The TV segment was meant to be funny. A reporter was interviewing children about the gender pay gap and asking them why they thought women were paid less than men.
But when Nahla Valji heard the response of a girl who was about 5 years old, she was devastated.
“She said that women earned less because they weren’t as good and weren’t really working as hard either,” recalls Valji, senior gender adviser to the United Nations general secretary. “When the interviewer asked her why, she said that she was sure most of them were just doing their online shopping at the computer.”
It’s a searing response that speaks volumes about how the gender pay gap affects girls from a young age. On average, women earn about 70 percent of what men make, Valji said. That doesn’t just take a financial toll, but also affects self-worth. It’s a problem that circles the globe; there is not any country today where women are paid equally to men, according to UN Women.
“Through undervaluing women, we reinforce a message to women to undervalue themselves,” she said. “What does that model for the next generation?”
The gender pay gap is something Starbucks, which has 30,000 stores in 75 countries around the world, is committed to helping change, said Lucy Helm, executive vice president and chief partner officer.
One year ago, Starbucks announced at its Annual Meeting of Shareholders that the company had reached 100 percent gender and racial pay equity in the United States. It also committed to working toward gender equity in pay around the world.
Wednesday, March 20, at this year’s annual meeting, Kevin Johnson, chief executive officer of Starbucks, will announce on stage that China and Canada are the first international markets to verify they have also reached gender equity in pay.
“We’re not just creating opportunities, we are creating equal opportunities,” said Johnson.
Closing the gap
Equal pay has been a federal law in the United States since 1963, but it’s often not the reality. Overall in the U.S., women still make 80 cents on the dollar compared to men, according to the American Association of University Women.
While change is happening, progress has been slow. At the current rate, according to the World Economic Forum’s 2018 Global Gender Gap Report, which benchmarked 149 countries, it will take 202 years before gender parity is reached around the globe.
But rather than get discouraged, Starbucks’ Helm remains focused on how the company can help to close that gap.
Behind her desk in an office at the Starbucks Support Center, the company headquarters in Seattle, is a drawing, made by a friend’s young daughter. A pink crayon border surrounds the words, written in a child’s hand: “Be bold, be fearless but mostly be yourself.”
It’s a daily reminder of the possible – and importance of working for pay equity not just now, but for future generations.
“Pay equity is not just about pay,” said Helm. “It’s symbolic of one aspect of equity. When you reach pay equity it increases opportunity.”
Valji said she’s heartened when she hears about companies like Starbucks working toward issues of gender equity. “It is so important the private sector is taking a leading role on this,” she said. “What Starbucks is doing is significant – internally taking stock, holding themselves to being accountable and being transparent. Those principles are so important.”
Starbucks’ global efforts are supported by the equal rights champion, the Billie Jean King Leadership Initiative (BJKLI). and other leading national women’s organizations, including the National Partnership for Women & Families and the American Association of University Women.
“Strong leaders lead by example and Starbucks is one of the strongest leaders in the fight for equality and inclusion,” said King, who was once the No. 1 one women’s tennis player in the world and has spent her career championing equal rights for women and social justice. “It is very fashionable today to be ‘in the discussion’ on equal pay. But it is entirely a different situation and a more positive step to be a leader in the space, as opposed to being a passive listener. Actions need to match the words.”
To that end, Starbucks has created a set of Pay Equity Principles that focus on three areas:
- Equal footing, such as paying our partners based on their skills, abilities, experience and performance and never basing it on gender;
- Transparency, such as publishing pay equity progress annually and using an offer standards calculator to determine starting pay range for roles;
- Accountability, such as setting a goal to achieve pay equity, conducting comprehensive compensation analysis, analyzing compensation decisions before they are final and more.
Starbucks has made these pillars public, with supporting best practices the company adopts in the U.S., and is sharing them with other companies.
“We can’t do it in a vacuum,” Helm said. “We are encouraging others to join us. We want to show it can be done – we’ve done it in the U.S. and we aspire to get to gender equity globally. We are always aspiring to do it better.”
‘You have to keep working on it’
It’s not enough to reach a goal – you have to keep working at it, stressed Helm. Maintaining equity requires vigilance. “We’re doing constant data analysis,” she said. “It’s not a once a year kind of thing.”
The company works to ensure that pay equity is considered at every step along the way – whenever any partner is hired or promoted – and not just during annual reviews. That’s true in the U.S. and other markets, such as Canada and China. “It’s constant. We are fighting against a tide,” said Helm.
Michael Conway, president of Starbucks Canada, said that it’s important to focus on larger issues that can lead to inequity.
“Even when you reach your goal, you have to keep working at it,” he said. “Our real focus is not on the number but on the behaviors and systems that drive equity.”
In Canada, women make about 88 cents for every dollar men earn when it comes to hourly wages for full-time workers, according to Employment and Social Development Canada.
“We’re committed to creating an equitable environment in Canada,” said Conway, “where everyone can flourish and be valued. We invite other businesses in Canada, and around the world, to join us in recognizing the importance of this issue not just for our employees but for women and families around the world.”
Addressing the complex root causes of the gender pay gap is critical in working toward change, said Valji of the U.N.
“It’s at multiple levels – how we value work in the home, barriers in the workplace and how we don’t value equal work in equal ways. Things that are perceived as women’s jobs are often undervalued,” she said. “Beyond that, women are disproportionately represented in lower paying jobs – such as care and leisure or administrative work. Even when they are performing the same functions in the same roles as men, the pay gap persists and is significant.”
Beyond having financial implications, a gender pay gap can affect how a woman feels about herself. Earlier in Valji’s career, she remembers initiating projects that she was then advised she needed to put senior men’s names on to have them taken seriously.
“The reality is how we judge people reflects on their own sense of self-worth and confidence,” she said, noting that it contributes to “imposter syndrome,” where women feel inadequate or question what they’ve accomplished.
“Undermining self-worth is a self-reinforcing cycle,” she said. Sometimes, that leads to women not applying for promotion or assuming some jobs may be out of their reach, said Valji, citing research that shows a woman won’t apply for a job unless she sees her own skills reflected in 80 to 90 percent of the job description. Men will apply if they seem themselves in only 30 to 40 percent.
“It doesn’t matter where we are in the world. There is not a gender equal society in the world,” she said. “Every girl grows up with some kind of sense of that.”
‘What does the sky look like?’
Angel Yu, vice president of partner resources for Starbucks China, said she was inspired by the famous saying that “Women hold up half the sky.” But, she knows that around the world, they are often not paid equally for that work.
That Starbucks China, which employs 52,000 partners, has gender equity in pay, is something that seems a given to Yu. For her and other leaders, it’s simply doing the right thing.
“In Starbucks China, we are committed to upholding the principles of gender pay equity,” she said.
The current gender pay gap in the nation of China overall is similar to that of the U.S. and Canada. Women’s monthly income is about 22 percent lower than men, according to a survey from Zhaopin.com, an online recruitment platform in China.
But Yu, the mother of two teenage daughters, said she’s hopeful for the future and that the strides being made for equity will continue. She encourages her daughters to feel confident and to stand up for themselves. She also mentors younger women early in their careers.
“I’m passionate about helping them,” she said.
Her own career has been driven by curiosity, early on leaving a comfortable job as a teacher near her hometown to pursue her dream of seeing more of the world. Now, she’s focused on helping others reach their potential.
“I’ve always had a dream,” she said. “How high can I fly? What does the sky look like?”
Starbucks Canada’s Tim Gallant contributed to this report.
