Boycott Watch  
September 11, 2012
Hypocrisy In The Starbucks Create Jobs for USA Program?
Summary: Why does Starbucks Promote US Jobs while yet carries only a few US made products? The answer may surprise you.
    Starbuck's launched a campaign called "Create Jobs for USA" in November, 2011, and since then the company boasts the jobs created. Meanwhile, Boycott Watch has received several emails asking why the company only carries a few US made retail products, such as their 'Indivisible' coffee mugs in their stores. A cursory look through a store revealed exactly what the complaints we received mentioned - there were only a few made in the USA products in Starbucks stores and even the 'Ohio' coffee mug is made in China. So we decided to look into it further and discover why Starbucks is not selling more American made products.

   Our first question was which US companies is Starbucks not buying products from. We discovered a pottery industry on the verge of extinction, and an order from Starbucks that may save it. The New York Times published an article about it on June 11, 2012 titled For Ohio Pottery, a Small Revival. It is not news that cheap products from China have put Americans out of business, and that article explains why many companies, including Newell Rubbermaid have been working to bring those jobs back to the USA.

   "Manufacturing in China is no longer a bargain" said Fred Taub, President of Boycott Watch. "Businesses have complained about receiving sub-standard parts, including railroad equipment, and in many cases businesses have no recourse if they receive defective merchandise. Businesses end up paying for items far in advance and may receive items that they just can't use and then it costs more to return a shipment of substandard parts back to China than it's worth. Even if parts are shipped back, there is no guarantee the company will actually get a refund. US manufacturing is more flexible, reliable and results in higher quality products."

   There is an additional problem for companies like Starbucks. New finance regulations such as Dodd-Frank added to EPA rules makes creating larger scale manufacturing virtually impossible in the US. Even if a company could afford it, by the time a company complies with feasibility study and environmental impact study requirements, the market for what they originally wanted to create is likely to be gone. If a company like Starbucks wants a new coffee mug, they can't wait years for the possibility of it to available via US manufacturing.

   The reason Starbucks manufactures mugs oversees, therefore, is that they have no choice for the quantities they need. On the down side, it is troubling that a company buying products oversees is likely to be stuck with thousands of overruns because of the quantity they need to order. Meanwhile, pottery companies in the US simply cannot keep up with the demand for US made quality products.

   "We are killing ourselves." Fred Taub continued. "It's no wonder business buy oversees. Despite all the difficulties, it's the only way get what they need. Starbucks should be applauded for seeking a US manufacturer and consumers need to support the effort, but the company still can't get the quantities of US made products they want because our own government makes it difficult."

   Meanwhile, the Starbucks coffee chain has been funding their jobs program by offering customers a bracelet for five dollars or more where the proceeds go to programs where jobs are created in the USA. The Create Jobs for website touts programs to build schools and other community use facilities, but these jobs are mostly temporary construction jobs, not actual long-term jobs which the program implies. Still, jobs are jobs and new construction fuels local economies so the more the better. While this is all good, our only complaint is that Starbucks needs to give the credit for these programs to their customers who contributed to the program, not take all the credit for the company.

   Boycott Watch contacted Starbucks and was directed to a press release where the company announced it is creating a new coffee product manufacturing facility in Georgia which will create 140 permanent jobs. Starbucks deserves credit here. In creating new products, the company had no choice but to pilot it outside the US because large-scale build-ups for new products are very risky. Now that the new products are well established, Starbucks is moving the manufacturing of their newest retail products to the US.

   Sadly, manufacturing is so rare in the United States these days that cities and states now compete for what used to be a mundane factory opening. An article in the Augusta Chronicle stated "Starbucks received "$600,000 in local improvements that local officials agreed to supply, such as grading, water and sewer lines and other infrastructure improvements. The company also qualified under state law for employee training, job credits, and tax credits for using the Port of Savannah to import its supplies and to export to England its finished product."

   The article does not tell the whole story. Even at the height of manufacturing, cities always built infrastructure to support industry because industry inherently supports the community they exist in. New water and sewer lines have traditionally never been a barrier to new manufacturing construction, but now businesses have to beg for it. In fact, since new manufacturing construction is so rare in the US, municipalities are forced to compete for the jobs businesses create. Tax abatement offers are even given to individuals to move into communities.

   The emails we received in this case are therefore wrong. There is no hypocrisy in the Starbucks jobs program. The fact is, Starbucks is doing far more than most companies when it comes to creating jobs in the USA. While US regulations have made it impossible to develop a new product line in the USA, Starbucks is bringing the manufacturing to the US now that it is a viable product. Starbucks is also seeking US manufacturers for coffee mugs and other retail items, which is the opposite of what most companies are doing. If you have ever watched the show Shark Tank on ABC, you have surely seen how investors insist on making products oversees to be more profitable. Starbucks, on the other hand, is standing up for its principals and setting an example for others by bringing manufacturing back to the US, thus Starbucks should be commended.

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