Starbucks says some workers will see at least a 5% wage increase starting January 2024

Starbucks announced Monday that it is raising wages for its workers at least 3% starting next year as part of an expanded benefits package the company is hailing as being “well beyond the industry average.”

The coffee giant said “Effective January 1, eligible U.S. retail hourly partners will see an incremental pay increase come to life, with at least a 3% increase and differentiated pay for eligible tenured partners.”

Starbucks adds that eligible employees with 2-5 years of service will see at least a 4% raise, while those with five or more years will get at least 5%. A spokesperson for Starbucks told FOX Business that there will be no menu price increases to offset the wage increases.

“Starting with competitive pay — Starbucks provides U.S. hourly retail partners an average wage of nearly $17.50 per hour, a barista wage range between $15 and $24 per hour and a total compensation, with benefits, of approximately $27 per hour,” Starbucks said in a press release.

A barista froths milk for a drink inside a Starbucks coffee shop in New York in January 2016. (Victor J. Blue/Bloomberg via Getty Images / Getty Images)

The expanded benefits also include accruing paid vacation time sooner, “innovative financial well-being and skills-building benefits, partner-centric scheduling, and the introduction of the first-ever North America Barista Championship,” according to Starbucks.

A barista places an iced coffee in the mobile pickup area at a Starbucks location in New York on Aug. 17, 2023.  (Gabby Jones/Bloomberg via Getty Images / Getty Images)

“Investing in our partners is what drives our success,” Sara Trilling, executive vice president and president of Starbucks North America, said in a statement. “It’s what makes us all partners. And an important way we do this is by investing in our partners’ journey, to bridge to a better future at Starbucks and beyond. This entails engaging with, and listening to, their ideas and feedback while continuing to raise the bar by offering competitive pay and the best benefits package in the industry.”

Starbucks says it currently operates more than 38,000 stores around the world.

Shares are up over 4% this year, trailing the S&P 500’s 13% rise.

Starbucks holidays favorites like the Peppermint Mocha, Caramel Brulée Latte, Chestnut Praline Latte and Iced Sugar Cookie Almondmilk Latte are making a comeback. (Starbucks / Fox News)

“In addition, Starbucks has invested more than 20% of the profits from fiscal year 2023 back into the partner experience through wage increases, training, and new equipment,” the company also announced Monday. “These investments have led to a more consistent partner experience in company-operated stores across the U.S. Coupled with higher wages and the expansion of hours, these investments have not only resulted in lower turnover, more meaningful improvement in our customer connection scores year-over-year but have also increased hourly total cash compensation by nearly 50% since Fiscal Year 2020.”