Starbucks to pay the UK’s National Living Wage

Costa Coffee received a fair amount of backlash when they announced that the cost of their beverages would likely rise in the United Kingdom when the minimum wage increases.

Trying to justify their threat, CEO Andy Harrison explained that “employment costs [were] there biggest single cost.”

However, Costa have been left with egg on their face as Starbucks, one of their biggest rivals, have publicly stated that they will be embracing the National Living Wage.

Baristas will earn £7.20 ($11) an hour, an increase of 43p on their standard rate at the moment, whilst supervisors will get an automatic 52p pay rise to £8.70 p/h ($13.2).

Those working in London – where the cost of living is substantially more than anywhere else in Britain – will receive an additional premium, though the details of this are yet to be formally announced.

Starbucks have also said that this change in wage structure wouldn’t be felt by the customers.

The National Living Wage was unveiled by Conservative Chancellor George Osborne in the summer budget earlier this year and will gradually see the minimum employers can pay staff rise to £9 by 2020.

Despite it being generally warmly received by the public, the move has drawn the ire of some businesses.

In addition to the publication of a wage rise, Starbucks also noted that they would be willing to offer interest free tenancy loans for their workers in order to enable staff to afford housing departs.

Speaking on this point, Kris Engskov, Starbucks’ president of European, Middle-Eastern and Asian operations, had this to say: “We know the cost of living is a key concern for many, with the average rental deposit in England now £1,226 ($1,863). And with over half of our partners being under 25 years old, that rent affordability especially is an issue that affects them.”