The economy in a nutshell: Starbucks’ union wave continues
Additionally, the New York State Common wants big banks to stop investing in fossil fuels, and a new report shows payday loan reforms are saving borrowers millions in fees.
Starbucks Union Wave continues
Workers at a Starbucks coffee shop in Pittsburgh voted unanimously (20:0) to become the first store in Pennsylvania to unionize.
Their success is part of a wave of organizing across the country. For example, workers in Eugene, Oregon also collectively voted to unionize. So far, 20 Starbucks coffee shops have unionized and more than 200 locations are filing for union elections, with five stores announcing their intentions in the past 48 hours.
NPR reports only one store has failed to unionize so far. Company executives are engaging in different tactics to steer employees away from unionizing, including the recent return of Howard Schultz as interim CEO on April 4.
Schultz has earned the trust of employees, but he is notoriously anti-union. On his first day back, he pledged that his job “coming back to Starbucks is to make sure that we…reimagine a new Starbucks with our partners at the center of it all, as a business partner pro, as a company that doesn’t need someone between us and our people.
However, employees continue to complain of mistreatment. Allegations of Starbucks’ illegal union-busting have caused the National Labor Relations Board (NLRB) to file a complaint against the coffee chain for allegedly threatening, interrogating and harassing workers.
“We would all be happy to give this company everything we had if we were also treated the same,” Claire Picciano, a barista from Virginia, told NPR.
Follow developments here.
New York State Common supports stopping fossil fuel funding
On Tuesday, the New York State Common Retirement Fund announced its support for a shareholder resolution that would call on financial institutions to end their funding of fossil fuel projects, Pensions & Investments reports.
Citigroup, Morgan Stanley, Bank of America, JP Morgan Chase, Goldman Sachs and Wells Fargo are the six companies that would be affected by this (non-binding) resolution, which each company adamantly opposes. Board members said the proposal was irrelevant given the company’s current environmental policies and that it “did not take into account the complexity of reducing carbon emissions”.
The pension fund, however, argues that it is necessary to create real change. “All of these financial institutions have made net zero commitments…but to ensure that these commitments are credible, they must adopt policies that eliminate funding for the exploration and development of new fossil fuels,” reads its filing with the Securities and Exchange Commission.
Four of the six companies affected by this resolution are in the list of the top 12 banks that finance the fossil fuel sector, according to a 2022 Banking on Climate Chaos report. JP Morgan Chase tops the list after investing $382 billion in fossil fuels over the past five years, despite joining the Net Zero Banking Alliance last year.
“It is high time to stop funding fossil fuels. Oil, gas and coal companies will not manage their own decline,” mentioned David Tong, Global Industry Campaign Manager at Oil Change International. “The simple reality is that the fundamental arithmetic of 1.5°C requires oil and gas production to decline by at least 3-4% per year, starting now. But no major oil and gas company has pledged to end its expansion, and banks around the world continue to pour billions into fossil fuels. This must stop now.
Payday loans are four times higher in states with less consumer protection
States with payday loan reforms have saved consumers millions in fees, according to a Pew Charitable Trusts report.
Researchers studied Colorado, Hawaii, Ohio and Virginia and found that the stronger consumer protections offered by these four states increased access to credit. Because of these policies, lenders are offering smaller loans that can cost up to four times less than single payment payday loans.
The policies put in place have also generally benefited lenders. Ohio’s own legislation offered new lenders who previously avoided working in the state due to confusing regulations. Now the shops that offer loans have become much more efficient, with the number of customers increasing from 500 to nearly 1,300.
The study concludes by recommending that other states enact their own comprehensive reforms, as 27 states offer one-time payment payday loans.
Solcyre (Sol) Burga was an Emma Bowen Foundation Fellow with Next City for the summer of 2021. Burga is completing her degree in political science and journalism at Rutgers University, intending to graduate in May 2022. As a Newark native and immigrant, she hopes to elevate the voices of underrepresented communities in her work.