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Banana Republic, Google Join Starbucks in 'Creating Jobs for the USA'

April 5, 2012

Do you ever wonder how often Starbucks CEO Howard Schultz sings John Lennon's "Imagine" to himself? ("You may say I'm a dreamer ...")

Mr. Schultz, who announced an initiative last October with the Opportunity Finance Network (OFN) called "Create Jobs for the USA," was both cheered and jeered for his efforts. Funds raised go to the OFN, which represents 180 Community Development Financial Institutions (CDFIs) across the U.S. These have been established to provide financing in areas where traditional lenders are in short supply. Institutions in the program have a 98 percent repayment rate.

As part of the "Create Jobs" campaign, Starbucks asked customers to donate $5 and receive a red, white and blue wristband with the word "indivisible" on it. The Starbucks Foundation also donated $5 million to the effort.

Earlier this week, Banana Republic and Google announced they were joining Starbucks in getting behind the jobs effort. The two companies announced promotions that would bring an additional $4 million to the $7.5 million raised to date. Starbucks told Reuters, the amount raised would help to create or sustain more than 3,800 jobs.

[Image: The Create Jobs for USA Fund]

Google joined with Starbucks in offering a daily deal through Google Offers, which closed this morning. Consumers could purchase $10 Starbucks vouchers for $5. Google said it would donate $3 for each voucher purchased up to $3 million.

Banana Republic said it would donate up to $1 million from purchases made in two four-day sales events with the first to start on April 19.

FINANCIALS:     [NASDAQ:SBUX]

Discussion Questions:

Discussion Questions: Will we see more retailers and consumer brands getting behind the "Create Jobs for the USA" campaign? What pros and cons do you see for retailers and brands getting involved in the effort?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How likely are consumers to patronize companies based on their involvement in efforts such as "Create Jobs for the USA?"

Comments:

As someone who works with small businesses, I can tell you first hand that trying to get critical financing through the banks these days is, to say the least, daunting. I think this is a splendid idea to help small businesses grow and add more jobs. The only "con" I see is the potential that, should the program become successful enough, the government will see a pressing need to, at a minimum, regulate it if not ban it outright.

Bill Emerson, President, Emerson Advisors

There were 'jeers' when this was announced by Schultz? Weird. I have seen the tiny promo pieces in Starbucks and wish they would've given it a little more fan fare. It's a good idea but it certainly needs more support and results reporting to work.

IMO, it would've been better to gather all those bay area partners beforehand for one grand launch. Having said that, it would've been optimal if the companies involved were of a broader range, both demographically and geographically. I get the fact that in this day and age, company affiliations are so complex it's hard to make something simple happen, even jobs, but if anyone can do it....

I hope they keep pushing the idea. The core purpose seems genuine and certainly, if anything is going to happen today on the jobs front, it's going to come from entrepreneurs, not the dysfunctional gov.

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Lee Peterson, EVP Creative Services, WD Partners

"Create Jobs in the USA" is a great idea. However, the real opportunity is not the selling of $5 wrist bands made in the USA, but starting to sell actual items in the Starbucks store that are made in the USA. If Mr. Shultz wants to really impact the US economy and "Create Jobs for the USA" I encourage him to start purchasing items that he sells in his store including coffee and travel mugs, etc., in the USA and not MADE IN CHINA.

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John Boccuzzi, Jr., Managing Partner, Boccuzzi, LLC

As early adopter companies in this cause, Starbucks, Google and Banana Republic will gain both excellent PR and inspire further customer engagement to already highly loved brands. It is a terrific way for brands with high levels of customer engagement to motivate their fans to do good. Eventually interest in this movement will wane, but for now it is a highly visible issue in America and these brands are doing the right thing to use their consumer clout to focus their corporate social responsibility on something meaningful to their customers and their employees.

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Mike Osorio, Senior VP Organizational Change Management, DFS Group

We may although I wouldn't expect it to become a mass movement quite yet. The pros are obvious, the primary one being more people are given an opportunity to go to work. The cons are equally obvious. Not all "jobs" are created equal, so companies backing these efforts are in potential danger of "blow back" the first time any of the subsidized programs is seen to discriminate, exploit or in any other way hurt workers.

Also -- Starbucks possibly excepted -- employers who live in glass houses shouldn't toss donations attached to rocks. Retailers have a long legacy of fostering underemployment which, while better than unemployment, has many of the same consequences. A company should make sure it is taking care of its own workers before it sets out to create more jobs for others.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

"Create Jobs for the USA" is a worthwhile effort and other retailers will jump on the bandwagon. I agree with Mr. Boccuzzi that retailers should be selling items "Made in the USA."

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

Interesting question. First and foremost, I agree with Mr. Boccuzzi that if these companies would get behind this with sourcing, there would be a huge impact. More so than that made with wristbands, marketing, and funding this small number of CDFIs dispersed widely over the US.

Changing securities laws and government policies that financially favor corporations over small businesses would go much further. Offering a private financing offering to a single investor can cost a small business tens of thousands of dollars. Our securities laws (driven by political influence from the financial sector) funnel the large majority of shareholder investment into only 50% of the economy. The other 50% has trouble getting the financing it needs to create profitable growth and new jobs within their communities.

I actually see a risk of blowback from this initiative -- there is ingrained cynicism in the public seeing these wristbands in a large chain to support jobs. There needs to be a lot more education as what that means. Otherwise, the cynical will dismiss it as pablum. Should I buy a bracelet at Starbucks or create a job by frequenting a local cafe?

'CWBillups'

Collecting 7.5 million dollars to support 3,800 jobs puts a yearly 40 hour work week at a gross pay rate of under $0.95/hr. Are we sending more jobs to China and India here?

'gjarnoldjr'

If these companies really want to create jobs in the U.S., I suggest they buy more things made here (wonder where those wristbands are made?). Of course the question actually isn't about whether or not such ideas do anything; it asks about the pros/cons...no downside I guess, unless people see through this as a cynical, feel-good PR effort.

'notcom'

I hope this grows. It's a great example of what the private sector can do to impact the national economy in a positive way without including government. Americans can take care of themselves as long as the government limits and even reduces its intrusion into areas where they don't belong.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

It is the same old marketing story for Banana Republic and Google. This is actually a promotion, disguised as a charity. From the other side of the argument, those receiving the fund would say it's better than nothing. For future job creation, I like Google's Science Fair competition better.

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Jerry Gelsomino, Principal, FutureBest

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