Baristas unite: The future of the coffee economy

Are service-sector jobs the new ticket to the middle class?
Jake Curtis / Getty Images

Just Us Coffee Roasters Co-op in Nova Scotia isn’t the kind of business that seems ripe for an employee revolt. The worker-owned co-operative serves up fair-trade organic coffee, pays above minimum wage and offers employees perks such as health benefits, profit-sharing and money to buy shoes.

Yet earlier this year, the company found itself at the centre of a growing protest movement among baristas in Halifax. In April, workers at the Just Us on Spring Garden Road complained that managers were denying them 30-minute breaks and that two employees had been fired for trying to start a union drive, sparking a wave of demonstrations. Workers at the store recently voted to join the Service Employees International Union, prompting workers at two Second Cup shops in Halifax to launch their own union drive this month, saying they want more control over scheduling and how to divvy up their tips.

While unionized coffee shops are rare, similar protests are playing out far beyond Halifax, as workers are faced with an economic recovery marked by the growth of low-wage service jobs and the continued hollowing out of traditional middle-class manufacturing positions. Last week, thousands of workers at fast food and retail chains in seven U.S. cities walked off the job, demanding their wages be doubled, to $15 an hour.

The nationwide strike came as President Barack Obama visited an Amazon fulfillment centre in Tennessee last week to tout his proposed middle-class job-creation programs. The visit, coinciding with Amazon’s announcement that it would hire 5,000 new warehouse workers, sparked a fierce outcry among independent booksellers who complain that Amazon is precisely the kind of company that has contributed to the decline of the middle class by employing poorly paid workers under punishing conditions in order to slash costs.

In Canada, as in the U.S., politicians have been quick to point to the hundreds of thousands of new jobs created since the recession as proof of a strong economy. But of the 463,000 new jobs created between January 2011 and February of this year, nearly a quarter of them were in accommodation and food service, according to a Statistics Canada study. Food-service jobs grew by 11 per cent over the past two years, compared to overall job growth across the economy of just 2.7 per cent. Meanwhile, the country has continued to shed manufacturing jobs, losing 52,000 workers in the past two years, while the retail sector remains Canada’s biggest employer.

It is into this environment that more young workers are graduating from college and university, armed with huge student debts and few professional job prospects. In the time it has taken for the economy to add roughly half a million new jobs, another 434,000 new grads have entered the workforce. And it seems all but certain that many will end up working in low-paying service jobs with few benefits. That shift—more educated workers coupled with more low-skilled, low-pay work—is having a dramatic impact on an industry whose workforce was traditionally made up of teenagers and workers with little education. Where once the biggest headache for retailers was high turnover, today those companies are increasingly facing push-back from a workforce demanding more from their jobs: more money and more hours, but also more say over their working conditions as they try to carve out a path into the middle class.

Roughly two-thirds of the 75 employees of Just Us are full-time, a noticeable change from even three or four years ago, says company co-founder Debra Moore. Last year, Moore surveyed employees on whether they wanted to scrap their health benefits in exchange for higher hourly wages. The response was a resounding “no,” as workers said they needed the benefits because they were settling down and starting families.

“We’re not part-time transient positions anymore,” says Shay Enxuga, 23, one of the baristas who organized the Just Us union drive. Last year, facing the prospect of racking up $30,000 in student loans and watching friends graduate without jobs, Enxuga dropped out of Dalhousie University to work full-time as a barista. “We have a whole generation of youth who are entering the workforce and are finding themselves working service jobs,” he says. “So I think the model of what it means to work in the service industry has to change.”

Proponents of the idea that service jobs can become the new ticket to the middle class point to sweeping changes in the manufacturing sector in the early 20th century that helped transform factory work from dangerous low-pay jobs into secure careers that could support a family. From 1914, when Henry Ford declared he would pay his employees what was then an exorbitant sum of $5 a day in order to reduce turnover and boost demand for his cars, governments saw higher wages and greater workplace regulation as the start of a virtuous economic cycle. But whether the service industry can follow the same model is far from certain.

Moore says the dispute over working conditions at Just Us was driven by the fact that the company was coming off a particularly bad year. “I don’t think there’s any magic answers that I can see,” she says. “The way our retail world is set up and what people are prepared to pay, it’s a challenge.”

Labour laws also haven’t kept pace with the dramatic shift toward a service-based economy, says York University labour and employment law expert David Doorey. Where once unions could sign up hundreds of workers just by standing outside the doors of a factory, they’re now chasing part-time employees with erratic schedules. And while a strike at a single auto plant employing thousands of workers could bring a company to its knees, a café can likely weather an extended walkout by bringing in a few extra managers to work overtime.

If service jobs are to become the new middle-class employment, it will mean paying our workers more, says Richard Florida, an urban scholar and head of the Martin Prosperity Institute at the University of Toronto. That might mean indexing minimum wage to the local cost of living so that expensive cities like Vancouver and Toronto pay higher minimum wages than cities like St. John’s or Winnipeg. (Minimum wages vary by province, but run from $9.75 in Alberta to $10.30 in Nova Scotia.) But that will also mean paying more for our burgers and fries. While consumers may have once been willing to shell out more for high-cost manufacturing goods to help support a middle class, it’s less clear they’ll want to pay more for their coffee and groceries. “Who’s more important,” says Florida, “the person who makes your car, your TV and your washing machine? Or the person who takes care of your kids, your parents, your house and prepares your food?”

Changes are already under way in the beverage industry, where consumers have proven they are willing to pay a premium for products such as fair-trade coffee and artisanal cocktails, spawning demand for latte artists and mixologists. Experienced baristas can command as much as $17 an hour in some cities (the equivalent of roughly $33,000 a year), says Vida Radovanovic, who runs a barista training school and espresso bar in Toronto. “My sales go up when that person is behind the bar,” she says.

Boosting service wages doesn’t necessarily mean we’ll be paying dramatically more for products, either. According to a letter sent to the U.S. Congress last month, signed by more than 100 American economists, raising the federal minimum wage from $7.25 to $10.50 would increase the price of a Big Mac by 10 cents.

Such thinking has its fair share of critics, who argue that a better way to drive economic growth is to invest more in education so that today’s fast-food workers can become tomorrow’s entrepreneurs and skilled workers in advanced manufacturing rather than slinging burgers at McDonald’s for more money. “The future for American blue-collar workers is to build better solar panels, more reliable electric-car batteries and to construct bullet trains,” writes Danny Leipziger, a Georgetown University professor and former World Bank director.

Those jobs are also needed, says Florida, but they won’t be enough to stem the flow of workers into service jobs, he adds. For every new manufacturing job, we create 12 new service jobs, he estimates. “If we don’t turn service jobs into good jobs, we won’t have good jobs,” he says. “If we want a middle class, all of us are going to have to pitch in to figure it out.”