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Starbucks’ CEO is ditching a merit system and giving all salaried staff a flat 2% pay raise instead

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Starbucks will provide a flat 2% pay bump to all salaried employees in North America this year as the coffee chain looks to minimize costs as part of CEO Brian Niccol’s turnaround efforts.

Under Niccol’s leadership, Starbucks has required some remote workers to relocate to its headquarters and tightened return-to-office policies for corporate employees. The flat 2% pay raise is a shift from the company’s previous compensation model that let managers weigh in on how much of a raise their salaried direct reports received.

The salary hike, first reported this week by Bloomberg and confirmed by Fortune, will apply to all salaried employees, including corporate employees, workers in manufacturing and distribution, and store managers. The uniform increase will not apply to baristas, who are hourly employees. 

Starbucks is hoping to turn around its business with Niccol at the helm, who had previously helped improve financial results at Chipotle. The coffee chain has asked executives to limit costs to help pay for efforts to create better service, improve wait times, and make stores more inviting, according to Bloomberg.

“As we make these significant investments, we need to carefully manage all our other costs,” the company said in an internal email reviewed by The Wall Street Journal

How Starbucks’ salary hike stacks up

The 2% pay raise lags behind the U.S. inflation rate of 2.7% and average salary increases measured by different surveys.

A recent Payscale survey found U.S. employers increased salary budgets by an average of 3.6% this year, and are expecting this average to edge down to 3.5% in 2026. 

Ruth Thomas, Payscale’s chief compensation strategist, told Fortune the move to lower pay increase budgets is not surprising as economic concerns like tariffs and policy uncertainty have pushed businesses to be more conservative. 

“Economic concerns have now overtaken labor competition as the primary driver of compensation decisions,” Thomas said. “Sixty-six percent of employers cite this as the reason for pulling back, up 17 percentage points from last year.”

A recent Korn Ferry survey found that in the U.S., an average of 3.6% salary increases are forecasted in 2025. This accounts for senior leadership positions, junior hourly roles and everything in between. Six percent of survey respondents were retail companies.

Yet, the survey also found that despite 88% of respondents anticipating revenue growth, one-third have already reduced salary budgets due to economic uncertainty, creating tension between talent retention and cost management.

Korn Ferry North America Workforce Reward & Benefits Leader Ron Seifert told Fortune a modest pay increase of 2% can be counteracted by above-market pay. As of mid-August 2025, the average hourly pay for a Starbucks corporate employee in the U.S. is $15.23 an hour.

As for a flat increase for all employees, Seifert said high performers may be compensated in other ways outside of their pay raise.

“We know most employers try to make sure that they’re taking care of their high performers and are mindful of the impact of the messages that they’re sending when they’re doing something different,” Seifert said. “My guess is that (the employers) also have other mechanisms for rewarding those individuals that just have not become as public.”

Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world. Explore this year’s list.



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Jim Carrey nearly quit ‘Grinch’ — Then the founder of SEAL Team Six came to the rescue

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For his role in the movie How the Grinch Stole Christmas, which came out in 2000, Jim Carrey’s tortuous costume and makeup had him on the verge of walking away from a $20 million paycheck.

In an interview with Vulture, the actor said the first day of makeup took eight hours. He nearly quit and suffered from panic attacks after having to wear painful green contacts, makeup that made him breathe through his mouth the whole time, and a full body suit made of itchy yak hair. But before he walked away, producer Brian Grazer hired the founder of SEAL Team Six to help Carrey suck it up.

“Richard Marcinko was a gentleman that trained CIA officers and special-ops people how to endure torture. He gave me a litany of things that I could do when I began to spiral. Like punch myself in the leg as hard as I can. Have a friend that I trust and punch him in the arm. Eat everything in sight. Changing patterns in the room,” Carrey told Vulture in the interview, which was published on Friday.

“If there’s a TV on when you start to spiral, turn it off and turn the radio on. Smoke cigarettes as much as possible. There are pictures of me as the Grinch sitting in a director’s chair with a long cigarette holder. I had to have the holder, because the yak hair would catch on fire if it got too close,” he added.

Carrey said he later learned that Marcinko was the founding officer of SEAL Team Six, the famed special-operations unit. Marcinko passed away at age 81 in December 2021.

Director Ron Howard and Grazer, who were also part of the Vulture interview, recalled Carrey struggling onset because of his Grinch costume.

Howard said the pain he endured was less physical than mental as the makeup was “destroying” Carrey’s skin. It was determined by medical professionals that Carrey couldn’t work in the makeup five days in a row, so he would have a day off or only be off-camera feeding dialogue on Wednesdays, he added.

“Jim started having panic attacks. I would see him lying down on the floor in between setups with a brown paper bag. Literally on the floor. He was miserable,” Howard said.

Carrey even offered to return his entire $20 million paycheck, with interest, Grazer said. But, instead Grazer found Marcinko. 

“I said, ‘Listen, you can quit on Monday, but just spend time with this guy on the weekend,’” Grazer said.



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A NIMBY revolt is turning voters in Republican strongholds against the AI data-center boom

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Silicon Valley and Washington sees data centers as the backbone of America’s AI future. Residents who live next to them see giant, humming boxes that throw diesel exhaust into the air, drive up energy costs, and steamroll the look and feel of their neighborhoods—“a plague,” as Virginian anti-data center activist Elena Schlossberg put it.

“If you live near a data center that’s being powered by these gas turbines, you simply cannot imagine living there,” she said. You can “hear the noise” in your home, added Schlossberg—who got into the fight a decade ago while trying, unsuccessfully, to stop Facebook from putting a data center next to her property. 

Virginia has long been the biggest data center hub of not just the country but the world, with northern Virginia alone hosting 13% of the globe’s data centers in 2023, according to a government report. And for just as long, residents have been locked into battles over what that footprint means for their communities.

Now, Schlossberg is leading a Virginia nonprofit group, Save Prince William County, to fight against the encroachment of even more data centers to power the AI boom. Data center power demand is expected to rise five-fold over the next decade, Deloitteprojects; reaching 176 gigawatts, the same amount as Australia and the United Kingdom’s entire power grids combined.

AI infrastructure builders, and the tech giants that plan to rely on the future data centers, argue that they’re essential to unlocking AI’s economic benefits. But in some of the states slated to house these projects, many of them politically purple-ish or even red—Virginia, Indiana, Ohio, Pennsylvania—voters are revolting, often successfully keeping them out of their neighborhoods. Indeed, in elections held last month, opposition to data centers helped tip elections in Democrats’ favor in Virginia and Republican-leaning Georgia.

“Folks realize they’re getting duped,” said Kerwin Olson, executive director of the Citizens Action Coalition, an environmental advocacy coalition based in Indiana. “It’s not just something they hear on Fox News or MSNBC anymore. It’s happening in their own backyard.”

Big Tech companies, Olson added, are showing up at local planning commissions and drainage boards asking for “huge giveaways”— tax abatements, zoning variances, special exceptions —”all to build a $3 billion box that creates maybe 30 jobs.”

“So they’re like, what’s in it for us?” Olson asked. 

Upcoming political battles

The first signs of what could be a broader political reckoning are appearing at the county level. In Prince William County—home to the fight over a proposed 2,000-acre “Digital Gateway” development near the Manassas battlefield—data centers have already forced recalls, resignations, and primary defeats of elected officials, Schlossberg said. The issue has become so radioactive that candidates in both parties now treat opposition to data-center expansion as a prerequisite for running, she added.

“It’s never been red versus blue,” Schlossberg said. “It’s people who live here versus people who want to industrialize where we live.”

That county could be a canary in the coalmine for what comes next, as Democrats and Republicans approach critical midterm congressional elections in 2026. Across key swing states, activists say the next wave of AI-driven projects will collide with a public that is far more organized and hostile than it was even two years ago. 

That tension is beginning to creep into politics. In Indiana, legislators publicly tout the state’s new data-center incentives while privately warning counties that the projects are not without tradeoffs. In Virginia, candidates now get asked—at libraries, at farmer’s markets, even at high school football games—whether they would support a temporary moratorium.

Olson said his group has been “buried” in calls from Hoosiers in every corner of the state—red, blue, rural, suburban—asking for help deciphering tax abatements and utility filings. “I’ve worked on energy issues for decades,” he said. “I have never seen anything like the scale of anger over this.”

When voters see those consequences firsthand, Olson said, they stop caring about geopolitical talking points. “You can tell people this is about beating China,” he said. But when their bill goes up, and their kids are sleeping in basements with headphones on because of the noise, they’re not thinking about China. 

At the heart of the backlash is a basic economic question that data-center backers haven’t convincingly answered: Why should the public subsidize infrastructure that serves some of the world’s richest companies?

Indiana’s first filing under its new “80/20” law—touted as a safeguard to make data centers pay most of the costs—still leaves ratepayers actually footing nearly 40% of the bill, Olson said. The organization he runs, Citizens Action Coalition, did an analysis that revealed that Hoosier households paid 17.5% more in utility bills in 2025 than the previous year. In Virginia, residents fear they will ultimately finance the transmission lines and new generation needed to serve hyperscale facilities.

“The public utility model was always a social contract,” Schlossberg said. “The data-center industry blew that up.”

In many ways, the backlash boils down to a trust problem. Residents don’t trust Big Tech, seeing the hyperscalers as being like “robber barons at the turn of the century” but with unprecedented demands for land, water, and power. Olson pointed to NDAs, closed-door negotiations, and local officials dining with tech consultants as signs that decisions are being made over communities’ heads and without local voters’ input. Layered onto that is a broader skepticism of AI itself: Many voters aren’t convinced they should remake their towns for what still feels like an unproven or overhyped technology.

“It’s like the Gilded Age, part two,” Olson said. “Only bigger.”



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The job market is so bad, people in their 40s are resorting to going back to school instead of looking for work

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This year’s job market has been bleak, to say the least. Layoffs hit the highest level in 14 years, job openings are barely budging, and quits figures are plummeting. It’s no wonder people feel stuck and discouraged—especially as many candidates have been on the job hunt for a year.

But some mid-career professionals are working with the cards they’ve been dealt by going back to school. Many are turning to data analytics, cybersecurity, AI-focused courses, health care, MBA programs, or trade certifications for an “immediate impact on their careers,” Metaintro CEO Lacey Kaelani told Fortune.

Metaintro is a job-search engine with 2 million active users that runs on open-source data processing more than 600 million jobs in real time.

“We absolutely see this trend [of adults going back to school] accelerating,” Kaelani said. “In combination with layoffs over the recent years plus the rise of required AI skills, experience is no longer enough.”

Kelsey Szamet, an employment attorney with Kingsley Szamet Employment Lawyers, said she’s noticed people over the age of 40 to go back to grad school or earn certifications.

While it’s not necessarily a completely new phenomenon, it’s becoming more frequently now that the job market is the pits. 

Still, Szamet he sees “very consistent” reasons for people considering higher education at a later stage in life. Some believe they’ve “plateaued” in their career and education is the only option. Others have been affected by layoffs, and there are some “who have simply become burned out with work and want a meaningful profession,” she told Fortune

“Then, too, come life circumstances. Some people have fewer responsibilities, better financial security, or a sense they will never make a change if they put it off now,” she said, adding she’s seeing more people pivot out of “dying industries,” those whose salaries have stagnated, or those who have job-security fears.  

According to Hanover Research, the top master’s degrees on the rise include artificial intelligence, mechatronics, robotics, automation engineering, research methodology, quantitative methods, as well as construction engineering technology. 

The cost of going back to school

Sometimes going back to school can also just feel like delaying the inevitable: student loans and other living costs. 

While grad school can certainly offer the opportunity to level-up your career once you’ve completed a program, it comes with financial and personal sacrifices, like time. According to the National Center for Education Statistics, one year of grad school, on average, costs about $43,000 in tuition. That’s nearly 70% the average salary in the U.S.

“Going to school can be very beneficial, but it can be very costly too,” Szamet said. And, when people are older and going back to school, they should consider “the cost of education and how stressful it can be to juggle work and family responsibilities with education.” Overall, “one ought to assess if it will be a good investment,” she added. 

That’s why it’s important to do your homework. Some degree programs have a better return-on-investment than others. According to an ROI analysis by the Foundation for Research on Equal Opportunity, the median master’s degree increases lifetime earnings by $83,000, but some master’s degrees are worth more than $1 million. Computer science, engineering, and nursing are some of the highest-ROI master’s programs, with average ROIs of about $500,000, according to the Foundation for Research on Equal Opportunity analysis. 

Still, 40% of master’s degrees actually “have no net financial value at all,” according to the report.  

“In today’s job market, going back to school only works when it’s strategic and targeted [like a] specific technical certification in a high-demand field), but fails when it’s vague,” Kaelani emphasized. “It’s no longer ‘more education equals a better job.’”

This story was originally featured on Fortune.com



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