Starbucks’ Crackpot Solution to Jobs Crisis: Donate and Wear a Wristband

[Omaha Steve]

http://www.inthesetimes.com/working/entry/12325/starbucks_crackpot_solution_to_the_jobs_crisis_donate_and_wear_a_wristband/

Tuesday Nov 22, 2011 11:00 am

By Josh Eidelson


(Image from Createjobsforusa.org)

Is America's problem a lack of credit? A Starbucks employee and an economist don't think so

This month Starbucks launched its Create Jobs for USA initiative, the coffee chain’s official response to America’s unemployment crisis. In a press release, CEO Howard Schultz says the program gives customers the chance to “take meaningful action to help create and sustain American jobs.” "We hope this a galvanizing moment as Americans come together to be catalysts for change,” Schultz continues.

The program will no doubt boost Starbucks’ image—and the density of red white and blue wristbands across America. But jobs? Not so much.

Starbucks’ plan to tackle the nation's massive jobs crisis is for you to donate money to a loan fund for “community businesses.” The fund, managed by a nonprofit called the Opportunity Finance Network, will make loans to small businesses, nonprofits and commercial real estate companies with the hope that the extra credit will free them up to hire more people. Starbucks is chipping in $5 million to "seed the project," not quite one two-thousandth of its record-setting revenue from the past year.

The rest is up to you—though a $5 donation earns you that tri-color wristband. And, in the words of Starbucks’ promotional pamphlet, “when you wear it you are stating that you have done your part, a big part, to help get this country back on its feet.” Starbucks employees are especially encouraged to donate – though an wristband will cost them most of an hour’s pay. “Nice work America,” adds the pamphlet, “getting ourselves back to work again and again.” (A Starbucks spokesperson declined to comment for this article.)

FULL story at link.

[Brickbat]

1. This is one of the more bizarre scams I've ever seen, and I've seen a few.

[sam11111]

2. WPA - the REAL solution. PS Sweden kept unemployment belo 2 and usually 1% during the Golden Age

1960 - 1990
---------------
1992 or thereabouts the RW lied its way into power with "trickledown" lie same as here.

[rugger1869]

3. Slavoj Zizek talks about this in...

his talk "First as Tragedy, then as Farce." The commercialization of charity....

http://www.youtube.com/user/theRSAorg?feature=watch#p/u/187/hpAMbpQ8J7g

[cyglet]

4. Ahem so they're not even putting up

much capital for their small business loans. And "donating" doesn't even guarantee anyone a job.

Are they then going to "donate" part of the interest back to you?

[Wise Child]

5. The first time I heard about this, I thought it was too ironic to be true,

Starbucks wanting to "help small businesses." If someone wants to sell coffee. They would either be rejected or sell Starbucks under license. If Starbucks opts for the latter, they would probably use those businesses as market research. They could take a look at "Bob's Coffee Joint" or "Amanda's Bakery & Cafe" and see what they can appropriate, either in the Starbucks shopping experience, or a brand new restaurant chain.

They have experimented with no-name cafes that had liquor licenses and minimalist yet cozy decors.

[doc03]

6. Starbucks made a demand before they moved in our local mall

that the mall had to toss a local kiosk coffee shop out and no other business in the mall could post a sign advertising that they sold coffee. There were four people that lost their jobs at the kiosk coffee stand, they had much better coffee at much better prices.

[Raine]

12. In my area Starbucks wanted a location that a gift store had

had for decades they wanted it because it had an area they could turn into a patio. The gift shop was forced out and into a less desirable location so Starbucks could have theirs. The owner of the store told me Starbucks scouted out the spot and wanted it, so they got it. x( They also forced out a Winchells donut shop for their location. Their dealings on that was even written up in the local newspaper.

[WildNovember]

7. It's the "yellow ribbon" answer to unemployment. And I bet Starbuck's takes a cut.

And I bet the stupid wristbands are made in China. Using scrap elastic from another product.

[nadinbrzezinski]

9. No actually they don't take a cut.

It is a business encubator. Here is the problem, in developed economies this is done by the state...in developing economies this is done by micro loan operators. They are very successful, ask India. It's just what it tells us about the us.

[WildNovember]

16. Microlending very successful? Only if you believe the lenders' press releases.

The Microfinance Illusion
MILFORD BATEMAN
University of Juraj Dobrila Pula, Croatia
and HA-JOON CHANG
University of Cambridge, UK

Summary. – In both developing and transition economies, microfinance has increasingly been positioned as one of the most important poverty reduction and local economic and social development policies. Its appeal is based on the widespread assumption that simply ‘reaching the poor’ with microcredit will automatically establish a sustainable economic and social development trajectory animated by the poor themselves. We reject this view.

We argue that while the microfinance model may well generate some positive short run outcomes for a lucky few of the ‘entrepreneurial poor’, the longer run aggregate development outcome very much remains moot. Microfinance may ultimately constitute a new and very powerful institutional barrier to sustainable local economic and social development, and thus also to sustainable poverty reduction. We suggest that the current drive to establish the central role of microfinance in development policy cannot be divorced from its supreme serviceability to the neoliberal/globalisation agenda.

http://www.econ.cam.ac.uk/faculty/chang/pubs/Microfinance.pdf


In fact, you don't know what Starbucks does with the money.

[nadinbrzezinski]

8. I got one for documentation

But these kinds of banks have been very successful in the developing world. It is what it says about the US. This should be the government.

[WildNovember]

10. Loaning people money to "create jobs" in a Depression isn't a successful strategy.

No demand, & the measley jobs created won't create demand.

[nadinbrzezinski]

11. They have a high success rate

But that is not the point. This is a business encubator. In the developing world is done by micro loan operations. In developed economies it's done by the government. That's the subtext.

[WildNovember]

17. Huh? Default rates are higher thanUS credit card loans.

While micro-lending is trumpeted as having historically high repayment rates, information to support this is limited at best.

Of the 260 MFIs that reported their “Portfolio at Risk over 30 days ratio” to the MIX (a World Bank clearinghouse for microfinance information) for 2004, the average rate was 4.76%, with some MFIs reporting up to 63.65% of their portfolio delinquent (200 other MFIs listed on the MIX did not report this delinquency figures).

By contrast, consumer credit card loans in the US reported only a 3.99% delinquency rate for Q4 ‘04. Delinquency for Commercial and Industrial loans was lower still, at just 1.83%.

Not surprisingly then, microfinance delinquency figures show an industry that, on average has shown to be riskier than lending in the US. (The star micro-banks beat the above US delinquency benchmarks, but alas, there are few stars)...

http://microcapitalmonitor.com/cblog/index.php?/archives/139-The-Risky-Business-of-Borrower-Default-in-Calculating-MicroFinance-Interest-Rates.html


It's a scam. And it doesn't do anything to lift people out of poverty. As could be predicted if one thought about it. Yeah, let's give poor people loans. The history (and there's a long history) is clear: it puts poor people into debt and most enterprises will fail.

But it's good for monetizing peasant economies, which is what the people pushing this stuff are interested in.

[nadinbrzezinski]

19. Not in places like India

Sorry...

Now if I cannot convey why this matters ... Let's try again...in simpler language.

Our federal government is behaving like a bannana republic, while claiming advanced economy status.

[WildNovember]

20. Oh really....

"The research is skimpy, but the research we do have shows increasingly that the main hope for microcredit--that it will generate millions of tiny businesses and these businesses will grow and pull their owners over the poverty line--is false," says Dichter


http://www.rediff.com/money/2006/nov/10spec.htm


I don't see why anyone would believe this microfinance fairy tale if they knew the history of loan sharks and pawn shops in Europe.

Microfinance just means the bigger financiers getting that piece of the action that smaller players used to get, and dragging peasants formerly outside the purview of capital into the capitalist action.

[nadinbrzezinski]

21. That is why the originator of this

Was given a Nobel prize.

Never mind. Have a good day.

[cyglet]

13. Doesn't matter,

corporations and government are one and the same...

[nadinbrzezinski]

14. Well actually it does

The ceo has realized something funny. People need jobs to afford his luxury goods, and it's damn good pr.

[cyglet]

15. Government

does everything for corporations. They could care less about small businesses. In that way the corporations' potential competition is crushed. Needless to say (it was stated above) they won't fund any competing coffeeshops and they depend on the public to put up capital (but WE'RE socialist!).

I wonder how long I'll have to wait until other corporations take the same initiative...

[Dawson Leery]

18. $2.5 Trillion in cash on hand and these sob's want to to give them more

money to hire. :argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh: