Did becoming a Starbucks barista just get harder?

Howard Schultz, president and CEO of Starbucks; Arne Duncan, U.S. Secretary of Education; and Dr. Michael Crow, Arizona State University President, answer questions after a press conference announcing that Starbucks will partner with Arizona State University to offer full tuition reimbursement for Starbucks employees to complete a bachelor's degree, on June 16, 2014 in New York City. The offer will be made to both full-time and part-time employees through online classes.

There was a time when a cup of coffee would run you 35 cents, and a college education could be had for a couple thousand dollars a year.

Now a latte costs three bucks plus change, and college can cost you more than $100,000.

On Monday, Starbucks announced it’ll help employees foot the bill for a degree.

It’ll pick up a portion—sometimes a large one—of the tab for online classes at Arizona State University. Even for employees working part time.

Listening to the Starbucks webcast today was a little like those Publishers Clearing House ads, where they give a really big check to an unsuspecting, overwhelmed winner.

One current employee stood to tell her story: “I started out as a barista and now I’m a store manager,” she said. “And when we heard the news, on the news, my daughter started jumping up and down and said 'Finally, you can graduate.'”

Yes, it was emotional. 

But, this is not all about feel good, corporate citizenship.  It’s also good business.

“Starbucks will certainly attract better employees,” said Zeynep Ton, a professor at MIT Sloan School of Management.

Becoming a barista is likely to get a whole lot more competitive. This sort of benefit will lure exactly the sort of employee Starbucks wants--young and highly motivated.

“They are competing for the cream of the crop of low-wage workers,” said Maureen Conway, Vice President at the Aspen Institute.

And Starbucks isn’t the only company looking to sweeten the pot for its workers, even its part timers. FedEx, UPS and others offer tuition reimbursement. Gap raised its minimum wage this year.

But not all employers feel the need to compete for the best of the best.  “Some employers are willing to get what they can get for the lowest wage they can pay,” said Elizabeth Malatestinic, a professor at the Indiana University's *Kelley School of Business in Indianapolis.

At some level, she says, the decision comes down to the culture of the business. 

And it's a lot cheaper for Starbucks to help employees get degrees, than it is for Starbucks to pay employees enough to afford  the ever higher cost of college.  


*CORRECTION: An earlier version of this story misspelled the name of the Kelley School of Business. The text has been corrected.

About the author

Adriene Hill is the senior multimedia reporter for LearningCurve.

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