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Economics in Brief: Starbucks Union Wave Continues

Also, New York State Common wants big banks to stop investing in fossil fuels, and a new report shows that payday loan reforms save borrowers millions in fees

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Starbucks Union Wave Continues

Workers at a Starbucks cafe in Pittsburgh voted unanimously (20:0) to become the first store in Pennsylvania to unionize.

Their success is part of a unionization wave across the country. For instance, workers in Eugene, Oregon, also voted collectively for unionization. So far, 20 Starbucks cafes have unionized and more than 200 locations are filing for union elections, with five stores announcing their intentions within the last 48 hours.

NPR reports that only one store has failed to unionize thus far. Leaders at the company are engaging in different tactics to sway employees away from unionization, including the recent return of Howard Schultz as interim CEO on April 4.

Schultz has earned trust among employees but is famously anti-union. On his first day back, he promised that his job “in coming back to Starbucks is to ensure the fact that we… reimagine a new Starbucks with our partners at the center of it all, as a pro-partner company, as a company that does not need someone in between us and our people.”

However, employees continue to claim mistreatmeant. Allegations about Starbucks’ illegal union-busting methods caused the National Labor Relations Board (NLRB) to file a lawsuit against the coffee chain for allegedly threatening, interrogating and harassing workers.

“All of us would be happy to give this company everything we had if we were also treated the same way back,” Claire Picciano, a barista from Virginia, told NPR.

Keep up with the developments here.

New York State Common Supports Stop of Fossil Fuel Financing

On Tuesday, the New York State Common Retirement Fund announced its support of a shareholder resolution that would ask financial institutions to end their financing of fossil fuel projects, Pensions & Investments reports.

Citigroup, Morgan Stanley, Bank of America, JP Morgan Chase, Goldman Sachs and Wells Fargo are the six corporations that would be affected by this (non-binding) resolution, which each company adamantly opposes. Board members said the proposal is irrelevant given current company environmental policies and that it does not “account for the complexity of reducing carbon emissions.”

The pension fund, however, argues that it is necessary to create actual change. “All of these financial institutions have made net-zero commitments…but to ensure that those commitments are credible, they need to adopt policies that eliminate financing of new fossil fuel exploration and development,” its filing with the Securities and Exchange Commission reads.

Four of the six companies affected by this resolution are within the list of top 12 banks that fund the fossil fuel sector, according to a 2022 Banking on Climate Chaos report. JP Morgan Chase leads the list after investing $382 billion in fossil fuels within the last five years, despite joining the Net Zero Banking Alliance last year.

“It is past time to stop financing fossils. Oil, gas, and coal companies will not manage their own decline,” said David Tong, Global Industry Campaign Manager at Oil Change International. “The simple reality is that the fundamental arithmetic of 1.5ºC requires oil and gas production to decline by at least 3-4% per year, starting now. But no major oil and gas company has committed to ending expansion, and banks around the world continue to pour billions into fossil fuels. That must stop now.”

Payday Loans Are Four Times Greater in States With Fewer Consumer Protections

States with payday loan reforms have saved consumers millions in fees, according to a Pew Charitable Trusts report.

Researchers studied Colorado, Hawaii, Ohio and Virginia and found that the stronger consumer protections these four states offer have increased credit access. Because of these policies, lenders offer smaller loans that can cost up to four times less than single-payment payday loans.

The policies implemented have also generally benefited lenders. Ohio’s own legislation brought forward new lenders that previously avoided working in the state because of confusing regulations. Now, stores that offer loans have become much more efficient with the number of customers increasing from 500 to nearly 1,300.

The study concludes by recommending that other states enact their own comprehensive reforms, as 27 states offer single-payment payday loans.

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter.

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Solcyre (Sol) Burga was an Emma Bowen Foundation Fellow with Next City for summer 2021. Burga graduated from Rutgers University with a degree in political science and journalism in May of 2022. As a Newark native and immigrant, she hopes to elevate the voices of underrepresented communities in her work.

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Tags: unionsnew yorkpayday loansgreen banks

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