Benzinga | Oct 28, 2021 01:15AM EDT

Starbucks Boosting US Employee Wages As It Looks To Lure In New Workers Amid Intense Competition

Starbucks Corp. (NASDAQ:SBUX) said Wednesday it would raise wages and ensure that its workers in the U.S. earn at least $15 an hour by summer next year.

What Happened Starbucks said that workers who have worked at the coffee chain for at least two years could get up to a 5% raise in late January, while employees with experience of at least five years could receive a pay hike of up to 10%.

The Seattle-based coffee chain also said that average wage for all its U.S. hourly workers would range between $15 and $23 an hour from summer 2022, averaging nearly $17 an hour.

In addition, Starbucks said it has extended its $200 referral bonuses to help attract new talent.

See Also: Starbucks' Earnings: A Preview

Why It Matters Starbucks' move to raise wages comes as restaurants in the U.S. struggle to attract and retain enough workers to serve customers as demand rebounds amid the economic reopening.

Fast-food giant McDonald's Corp. (NYSE:MCD) and Mexican food chain Chipotle Mexican Grill Inc. (NYSE:CMG) announced wage hikes for their employees in May this year.

Starbucks last raised wages for its U.S. employees by 10% or more in December 2020.

Joseph Brusuelas, chief economist for RSM US LLP, said earlier this month that the era of surplus U.S. labor is drawing to a close and a $15 minimum wage is becoming the new standard in the post-pandemic economy.

Price Action: Starbucks closed 1.25 lower in Wednesday's trading at $113.51.

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