Howard Schultz, the CEO of Starbucks, is well known for taking a stand on political issues, from veterans rights to overcoming political gridlock (remember those Come Together cups during the debt ceiling debacle and government shutdown?). Over the last few days, he’s stepped into the tricky terrain of racial issues and police brutality, with an impromptu Open Forum at the Starbucks Support center in Seattle, in which he offered Starbucks employees a chance to sound off about their own experiences with racism and racial issues. On Tuesday, he released the highly emotional video from that meeting to all 135,000 Starbucks employees in the U.S., along with a letter (below) provided exclusively to TIME in which he outlined his concern about the economic and political effects of racism and increasing social polarization in America. “I’ve watched with a heavy heart as tragic events and unrest have unfolded across America, from Ferguson, Missouri to New York City to Oakland, California,” wrote Schultz. “I’m deeply saddened by what I have seen, and all too aware of the ripple effect.”
Indeed, it’s an issue I’ve spoken about in depth with Schultz. As I wrote several days ago, Starbucks is a perfect retail proxy for the American economy, which is increasingly bifurcated, a nation of latte buyers and those who sell the coffee. The minute-by-minute data that Starbucks gets on consumer spending is perhaps the most sensitive indicator of U.S. consumer confidence around, so it was startling to hear from Schultz that coffee sales took a hit during the riots in Ferguson, which is something that concerns him not only from the point of view of the economy and U.S. consumers — whom he calls “fragile” — but from a political stability point of view as well. “I don’t want to go into specifics,” Schultz told me the day after riots in New York City, following the announcement that a grand jury would not indict a police officer in the chokehold-related death of Eric Garner, “but I can tell you that the volatile situation in Ferguson and the situation in New York had an immediate negative effect on consumer behavior across the country.” What’s more, Schultz says he believes there’s a growing despondency amongst the public that government officials simply aren’t up to the task of dealing with these issues, something that will have an effect on business and the economy, even in the midst of a so-called “recovery.”
“I talk to other people who are running national retail companies,” says Schultz. “We’re at the heart of the holiday season, and there are protests going on throughout the country, but aside from that, the American people have a fractured level of trust and confidence in government today. That’s a fact. Over the last year, if you track the bar graph of where that [trust] was a year ago and where it is today, it has continued to go down,” he adds. “So I think every consumer business, no matter who you are or what you do, is fighting against the cloud that is hanging over the American people, about how they’re feeling about the country, how they’re feeling about their future — and all of that is directly linked to their lack of faith and confidence and trust in the leadership in Washington.”
Those sentiments mirror some of the political statements Schultz made during his investor conference in Seattle a few days ago, leading to speculation that he may be considering a push into politics, or even contemplating a run as a third-party candidate (Schultz has stopped giving personal political donations out of disgust with both parties). While sources close to him say he’s considered politics in the past, Schultz tells me he feels he can “do more to effect change where I am right now” and isn’t considering a run at the moment.
That said, he won’t shy away from political discussion, and from sounding off on his own experiences. (Schultz, now a billionaire, grew up in the projects in Brooklyn.) He’s planning more Open Forum meetings in the coming weeks to discuss race issues, and beyond that he also has big plans to do more around veterans hiring, youth employment and student debt issues in the coming months.
“If I feel like I can sincerely attack a problem and make a difference, I’m going to jump in and try and do it. There are clearly such significant and substantive problems that need to be addressed, and this long tail, which has been going on for years, is getting to the point where it’s going to have a systemic effect on — forget the national economy, on the country [as a whole]. The conscience of the country. The ability of the country to continue to succeed at the level it once did,” Schultz says. “I came from a family that lived on the other side of the tracks and the American promise and the American dream was available to me; what I think about and what I’m concerned about is, is that going to be possible for those kinds of young people who grew up on the other side of the road today?” It’s a question that even in the midst of an economic recovery is becoming more and more pressing, for citizens, business people and politicians alike.
The full text of Schultz’s letter is below:
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