Starbucks starts fund to spur U.S. job creation

Mon Oct 3, 2011 11:32am EDT

Poeple walk past the Starbucks outlet on 47th and 8th Avenue in New York June 29, 2010. REUTERS/Lily Bowers

Poeple walk past the Starbucks outlet on 47th and 8th Avenue in New York June 29, 2010.

Credit: Reuters/Lily Bowers

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(Reuters) - Starbucks Corp CEO Howard Schultz, decrying a lack of leadership in Washington, said his chain of coffee shops is helping to launch a nationwide fund designed to stimulate U.S. job creation.

Starbucks introduced on Monday the "Create Jobs for USA" fund in partnership with Opportunity Finance Network (OFN), a group of private financial institutions that provide affordable loans to low-income people and communities.

Schultz called small business an engine for job growth that has stalled and said entrepreneurs must have access to credit so they can hire again.

"Businesses and business leaders need to do more; we can't wait for Washington," Schultz told Reuters in an interview, adding that Americans deserve better leadership.

The Starbucks founder and chief executive caused a political stir in August when he called on his peers to withhold campaign donations to the president and members of Congress until a "fair, bipartisan" deal on the country's debt, revenue and spending was reached.

Schultz, who recently completed a painful but successful company turnaround that involved the closure of some 600 U.S. cafes as well as significant layoffs, also has asked fellow business leaders to pledge to step up hiring.

The CEO said he has been frustrated by political dysfunction in Washington and called on people in positions of power to "put their feet in the shoes of people who are being left behind."

Labor figures due on October 7 are likely to show the unemployment rate stuck at the September level of 9.1 percent despite near-zero interest rates. Some 30 percent of the jobless have been out of work for at least a year.

President Barack Obama, facing re-election in just over a year, has proposed a $447 billion jobs package. Fellow Democrats in the Senate are looking for ways to fund that stalled plan.

NO POLITICAL AMBITIONS

While he has inserted himself into the national political debate, Schultz said he has no political ambitions.

"I have no interest in politics or political office. I'm just doing this as a private citizen trying to make a difference," he told Reuters.

The new jobs fund announced on Monday will be seeded with a $5 million donation from the Starbucks Foundation.

As of November 1, the fund will accept donations at CreateJobsforUSA.org and at the roughly 6,800 company-owned Starbucks cafes in the United States. Donors who give $5 or more will get a wristband inscribed with the word "Indivisible."

Moody's Analytics Chief Economist Mark Zandi said the fund will be helpful to small businesses having difficulty securing loans in a tough economic climate.

Starbucks, which is covering OFN's administrative expenses and the cost of making the U.S-made wristbands, said every $5 donation to "Create Jobs for USA" will generate $35 in financing for small businesses, nonprofit groups, commercial real estate projects and affordable housing.

OFN Chief Executive Mark Pinsky said the group's network of Community Development Financial Institutions (CDFIs) has been making as many loans as possible during the current recession, which has cost one in six American workers their jobs.

"Our hope is that this will help kick-start a whole different attitude about what's possible," said Pinsky, who added that his group's CDFI loan portfolios are healthy.

Starbucks earned $945.6 million for the fiscal year ended October 2, 2010, according to financial filings. At that time, the Seattle-based company had about 107,000 U.S. employees.

Shares in Starbucks were off 1.8 percent at $36.61 in late morning trading, weighed down by concerns over Greece's teetering finances.

(Reporting by Lisa Baertlein in Los Angeles and Phil Wahba in New York; Editing by Gerald E. McCormick and John Wallace)

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Comments (2)
TheLazyComc wrote:
Starbucks starts fund to spur U.S. job creation? This should be interesting. As a rule, I don’t trust corporates. Starbucks is different… why? How? The only people a corporate is ever worried about is its stockholders. And THAT… is what has destroyed the Untied States.

Oct 03, 2011 4:43pm EDT  --  Report as abuse
Davebald1 wrote:
It makes me proud to own stock in the company. It’s a little strange to think of a multi-billion dollar company as being involved in a “grass roots effort” but what a great initiative for a private business – to get involved in expanding entrepreneurship and jobs with their own capital and encouraging others to do the same. I for one will be happy to give $5 (or more) to help them help America.

Oct 04, 2011 2:38pm EDT  --  Report as abuse
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