Starbucks CEO: Forget Politics, Hire Workers

Discussion
Aug 17, 2011
George Anderson

Howard Schultz wants other companies to join his and stop giving money to politicians. Instead, he recommends they start using those funds to put people back to work and get their businesses and the economy growing again.

In an internal memo and message to other business leaders, Mr. Schultz discussed the state of affairs in the nation’s capital and his growing frustration with "the lack of cooperation and irresponsibility among elected officials as they have put partisan agendas before the people’s agenda."

He continued: "In these uncertain times, it’s important that we ask what we at Starbucks can do. We have a responsibility as well as an opportunity not to be bystanders, but to act in ways that can ease the collective anxiety inside and outside the company. In this regard, Starbucks’ innovative, global growth and new distribution channels will continue to create full and part time jobs, and not just in the U.S., but in the more than 50 countries where we operate."

In an interview with Joe Nocera of The New York Times, Mr. Schultz put forward the idea of boycotting political contributions and business leading an economic revival now instead of waiting on politicians to lead the way.

"The fundamental problem," Mr. Schultz told the Times, "is that the lens through which Congress approaches issues is re-election. The lifeblood of their re-election campaigns is political contributions."

Mr. Schultz, who tends to support Democrats, believes that business leaders need to cut off contributions to all parties and use those funds to create jobs and improve their own businesses.

Nasdaq OMX Group CEO Bob Greifeld forwarded Mr. Schultz’s email to the roughly 3,000 CEOs of companies on the exchange.

"Now is the time for corporate leadership, and for the collective voice of our CEOs to be heard. It is my hope that our leaders can put politics aside and focus on generating long-term sustainable growth driven by the private sector," Mr. Greifeld wrote in his email, according to ABC News.

Discussion Questions: Do you agree with Howard Schultz that companies should stop contributing to political campaigns and use those funds to grow their businesses and create jobs? Should the trade associations that represent American businesses do the same?

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20 Comments on "Starbucks CEO: Forget Politics, Hire Workers"


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Paula Rosenblum
Guest
9 years 8 months ago
Boy, this is bound to be a contentious issue. The short answer from me is YES. Now to the details. First of all I applaud Mr. Schultz for taking a peek outside the blinder of “what’s good for my shareholders in the short term is good for America, so I’m going to support candidates that support my political agenda.” Our short-sighted political agenda has led to the borderline destruction of our economy. Chasing the highest IMU has led us to decimate our manufacturing base, creating a structural unemployment problem that we may never get out of. And those same policies have caused the insane debt we carry and will pass on to your children. I do not believe our trade associations should continue to lobby for even more outsourcing of American jobs. Free trade has turned out to be pretty one sided. While I am not a protectionist, I do believe in protecting our economy. And a healthy economy has a judicious mix of production and consumption. Next, the extreme partisanship and absurdity of our… Read more »
David Livingston
Guest
9 years 8 months ago

This appears to be press release hype. I’ve never heard of an internal memo to external business leaders. Starbucks will do as they see fit. However, we all know that greasing the palms of politicians is just another cost of doing business. Basically he is telling Republican business leaders to stop donating money so his party has a better chance at winning.

Bill Emerson
Guest
Bill Emerson
9 years 8 months ago

Howard has it right. So far, the contributions to our fearless (or is that feckless) leaders has gotten exactly what for the business community? One of the highest corporate tax rates in the world community – check. Dodd-Frank – check. ObamaCare – check. The EPA unleashed – check. The list goes on, but the point is that the money spent buying politicians could be far better spent doing what Washington is demonstrably incapable of – creating jobs.

Having had my vent (thanks, I feel much better), the sad truth is that these contributions are really protection money. Without the pay-offs, who would even consider the implications to the business community? The trial lawyers association, perhaps? The unions?

Ben Ball
Guest
9 years 8 months ago

This is one is so easy it will probably never happen.

The answer is simple — if government will get out of business then businesses will get out of politics. But government HAS to go first.

Here’s the rub with Mr. Schulz’s well intentioned, but doomed, idea of doing it the other way around. It’s a classic analogy of “who’s going to lay their gun down first?” As long as government is “available” to influence business, any one business that stops participating in politics potentially loses competitiveness. At a minimum, if all businesses temporarily stop playing in the political sandbox, then each has an opportunity cost of foregoing the possibility of gaining advantage. Eventually someone will break ranks and take that advantage. It’s called human nature (human greed if you aren’t sensitive to the politically correct) and the last I heard, no one has found a cure for it yet.

The only player on the field who could act unilaterally is government. Let’s do it!

Max Goldberg
Guest
9 years 8 months ago

Money is the life-blood of politics, and politicians set the rules for business, so I don’t see this playing out on a voluntary basis. Everyone seems to be upset with the partisan bickering and lack of progress in Washington, but no one seems to have an answer that would motivate change.

While I salute Mr. Schultz for his stand, I don’t think it will have much impact when companies want to see the rules written in their favor.

Mel Kleiman
Guest
9 years 8 months ago

Great idea, and I wish it could be implemented but the minute you quit supporting politicians who support what you stand for, you allow the competition to support the politicians that support the causes you don’t stand for to strengthen their position.

Gene Detroyer
Guest
9 years 8 months ago

I am all for this, but the reality is that the ROI for political contributions for business is considerably higher than most any other investment. Consider the outrageous example of GE. They spent several hundred million to sculpt laws to save them billions in taxes. (This is exactly what GE should have done in a capitalistic society.) The effective tax rate of the Fortune 500 is something less than 22%. Any CEO who forgoes political contributions to better the position of his profits should be fired.

Certainly, this is not good for the country (define the country as the people). Therefore corporate contributions must be made illegal by law. Unfortunately, the trend has been going in the other direction.

Gene Hoffman
Guest
Gene Hoffman
9 years 8 months ago

Every idea has some merit. So, too, does Howard’s. But this seems more gimmicky than a curative idea.

Political contributions are opium for underachievers. And opium is addictive. Thus I expect no change there. America needs more new jobs. Hirings will occur when people feel stability and consistency with the processes that are created within government’s realm.

Dan Berthiaume
Guest
Dan Berthiaume
9 years 8 months ago

This is a great idea. From a PR standpoint, it’s an absolute winner, and even if the number of new jobs created is not significant, the removal of corporate and special interest influence from US politics can only produce positive results.

Roger Saunders
Guest
9 years 8 months ago
Mr. Schultz’s view may work well for Starbucks, and we all should applaud him for guiding Starbucks Corporation away from “Political Support of legislators.” If Starbucks has significant savings from this particular line item, they can quickly shift that to job creation issues. That same formula simply will not work for other industries. The entertainment industry, manufacturing industry, automotive industry, retail industry, etc., have differing needs from both sides of the political aisle. In some cases, they are positioning their interest counter to labor, legislative, financial, import/export, or other issues. They feel their voice is best heard in the political contribution fashion — as they understand that other groups will continue the spend. Would Mr. Schultz tell union membership to stop spending money on political campaigns, woman’s groups be shut off from this messaging, teachers walking away from contributions, etc? What is good for Starbucks just doesn’t apply to ALL OTHER BUSINESSES. Good to hear, however, that Starbucks is likely to cease providing political contributions — I’ll stop in for a cup of coffee tomorrow… Read more »
Ed Rosenbaum
Guest
9 years 8 months ago

I totally agree with Mr. Schultz. Government needs to get out of business. To make this happen, businesses need to stop supporting these partisan politicians and make them do what they were elected to do…make and enact legislation that best suits our country’s needs. This is not a win/lose game that they seem to be playing.

Why in the world are we sending billions of dollars overseas and supporting wars that will have no winner when there are countless Americans losing jobs and houses within our borders? We continue to elect people who promise change and it never happens. Once they get inside the D.C. beltway; it becomes WIIFM (what’s in it for me).

Bill Bittner
Guest
Bill Bittner
9 years 8 months ago
I applaud Mr. Schultz’s goals but although our political process is ridiculously expensive, I think merely holding back funds is not the cure. The two primary causes of our current dilemma are gerrymandering and non-participation in primary elections. Every 10 years (after a census) state governments define their congressional districts. Gerrymandering is the age old process of the party in power defining these districts to ensure its continued strength. The result is that rather than defining congressional districts based on communities with shared circumstances, the districts weave around neighborhoods based on party affiliation to create unbeatable districts. Secondly, the general population (i.e. the “independents”) seldom participates in primary elections. It doesn’t matter which party you favor, if the only people who are voting in a primary are the “party loyalists” then all the primary candidates are forced into extreme positions in order to get past the primary. The result is that any candidate who expresses a need for compromise or working with the other side is immediately ousted from the process. So what are some… Read more »
Phil Rubin
Guest
9 years 8 months ago

If there were not a Democratic incumbent, it would be easy to expect speculation that Schultz got fired up after the Iowa Caucuses and wants to run!

Everyone from every angle wants to make excuses and lay blame on the economic situation but there are clearly divisions politically, economically and globally.

Neither party, especially in the US Congress and the White House, is well liked at the moment but Schultz is on to something: it’s up to businesses, and entrepreneurs, to make the situation better. We have tremendous opportunity here and while there are things we have less control over (e.g., the EU) as the most important global leader, we need to lead.

For what it’s worth Mr. Schultz, we’ve done our part and just yesterday we hired a new employee!

Ted Hurlbut
Guest
Ted Hurlbut
9 years 8 months ago

The reason companies have contributed to politicians rather than hire workers is that they believe they get a greater return on their investment spending their money that way. It’s a pretty strong indication of how intrusive government has become in business decision-making, if not in bottom-line business results.

Ed Dennis
Guest
Ed Dennis
9 years 8 months ago

As an investor, I have never invested in any company because they make political contribution. I invest for two reasons 1. Short-term gains 2. Long-term gains. In other words, investing is for the purpose of increasing my wealth – period! If you want to invest your money to make someone feel good, go ahead, but you will end up losing your shirt. Business should only support politicians through lobbying efforts which enhance their ability to make a larger profit. For gosh sakes, has everyone forgot what business is all about?

Kai Clarke
Guest
9 years 8 months ago

This is a great idea! If more companies would focus on the most pressing need that they have–hiring workers (and how it impacts the entire economy), the trickle down effect would be tremendous!

Warren Thayer
Guest
9 years 8 months ago

Well-intentioned and appealing, but Quixotic. If we’re truly all fed up with how the system operates, how about changing the laws (and those feckless Congressmen and Senators as well)? That’s how it’s supposed to work in a democracy. We’re still a democracy, right? I haven’t read the papers in a few days.

Jerome Schindler
Guest
9 years 8 months ago

I stopped contributing to politicians over ten years ago even though in Ohio the first $100 is essentially free as the legislators years ago enacted a 100% Ohio income tax credit for contributions to candidates for state office to a max of $50 per person, $100 per couple per year.

Fabien Tiburce
Guest
Fabien Tiburce
9 years 8 months ago

The two options really aren’t mutually exclusive. Businesses can and should hire more. Earnings are strong and North American businesses are largely hoarding cash. The great Henry Ford once said he paid his employees well enough so they could afford an automobile. What is the point of hoarding cash if you don’t have any buyers for your services and manufactured goods? But frankly, I fail to see how political contributions and hiring would be mutually exclusive.

Arthur Rosenberg
Guest
Arthur Rosenberg
9 years 8 months ago

Are people dissatisfied with Congress? Perhaps instead of giving campaigns millions, we can pay down the national debt. Why change anything when we have the best government money can buy? Well, it’s not the best government but….

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