Small-Margin Businesses Close at Signs of Unionization

Likely because the union organizing campaigns at Starbucks is getting a ton of media coverage, small, independent coffee shops are seeing an uptick in copycat union organizing.

This isn’t reserved just for coffee shops, though.

Most counter-service industries are seeing the same effect. Fast food workers are organizing, too.

Baristas and fast food employees were traditionally viewed as too transient to organize. They changed jobs, on average, at least every year. They may still change jobs at that pace, but they are organizing stores during their short stints of employment.

The counter-service industry operates on incredibly small margins. An increase in pay, paid time off, employer-sponsored health care, etc. is frequently not economically feasible for the owner.

Enter this story about the Steven Darwin who owned a coffee shop for 30 years. His employees voted to form a union.

Some say the union demanded a pay raise from $14.50 to $24 dollars per hour. This may have been enough for Darwin to decide to close. He mentioned sunsetting the store a few years earlier.

Either way, the workers are without a job. The community is without a coffee shop. The landlord is without a tenant. Freelancers are without a place to work.

These same stories are occurring at counter-service stores in every state.

I’m dealing with enough of them to know that the media’s outsized coverage of the union organizing at Starbucks is having a ripple effect throughout the country.