Are Starbucks (SBUX) and CEO Howard Schultz on to something that's on the cutting edge?
Starbucks' Schultz, who argues that the lack of leadership problem in Washington has gone on long enough, has announced that the world's best known coffee chain will start a nationwide fund designed to stimulate U.S. jobs growth.
Make that jump-start jobs growth, as the U.S. economy has created fewer than 100,000 jobs in the last two months, as both U.S. and global GDP growth slowed as the effects of fiscal stimulus wore off.
Enter Starbucks with its Create Jobs for USA fund in partnership with the Opportunity Finance Network, a group of financial institutions that provides affordable loans to low-income adults and communities.
This is about using Starbucks scale for good, Schultz said in a statement.
Job Fund Seeks Donations From Public
Beginning Nov. 1, Starbucks will begin collecting donations of $5 or more from customers in a bid to create jobs. Every $5 donated will help create $35 in loans or lending capacity. Starbucks, which has 7,000 coffee houses, will also donate $5 million to the fund. People who donate will get a red-white-and-blue wristband inscribed with the word indivisible.
Schultz said small business is a growth engine that has stalled and these organizations need greater access to credit to be able to hire again.
Businesses and business leaders need to do more; we can't wait for Washington, Schultz said Monday, Reuters reported.
Seattle-based Starbucks grew from a local coffee house, to a large global chain, to an almost iconic status in the 1990s - it was the other place besides work and home favored by upwardly-mobile professionals during the Roaring 90s.
Starbucks later experienced a slump related to over-expansion and ill-conceived menu additions: the chain closed 600 underperforming stores amid the 2007-2009 Great Recession.
Economic Analysis: Starbucks CEO Schultz is following a quintessentially American tactic: the third way. Schultz isn't opposing Congress with venom, nor is he seeking government funding: he's going around Congress, and calling on the American people to become part of the small business funding process, and that is admirable.
Readers and investors may ask, however, does Schultz have any aspirations for public office? So far, Schultz has no interest in politics or public office.