Starbucks introduced on Monday the “Create Jobs for USA” fund in partnership with Opportunity Finance Network (OFN), a group of private financial institutions that provide affordable loans to low-income people and communities.
Schultz called small business an engine for job growth that has stalled and said entrepreneurs must have access to credit so they can hire again.
“Businesses and business leaders need to do more; we can’t wait for Washington,” Schultz told Reuters in an interview, adding that Americans deserve better leadership.
The Starbucks founder and chief executive caused a political stir in August when he called on his peers to withhold campaign donations to the president and members of Congress until a “fair, bipartisan” deal on the country’s debt, revenue and spending was reached.
Schultz, who recently completed a painful but successful company turnaround that involved the closure of some 600 U.S. cafes as well as significant layoffs, also has asked fellow business leaders to pledge to step up hiring.
The CEO said he has been frustrated by political dysfunction in Washington and called on people in positions of power to “put their feet in the shoes of people who are being left behind.”
Labor figures due on October 7 are likely to show the unemployment rate stuck at the September level of 9.1 percent despite near-zero interest rates. Some 30 percent of the jobless have been out of work for at least a year.
President Barack Obama, facing re-election in just over a year, has proposed a $447 billion jobs package. Fellow Democrats in the Senate are looking for ways to fund that stalled plan.
NO POLITICAL AMBITIONS
While he has inserted himself into the national political debate, Schultz said he has no political ambitions.
“I have no interest in politics or political office. I’m just doing this as a private citizen trying to make a difference,” he told Reuters.
The new jobs fund announced on Monday will be seeded with a $5 million donation from the Starbucks Foundation.
As of November 1, the fund will accept donations at CreateJobsforUSA.org and at the roughly 6,800 company-owned Starbucks cafes in the United States. Donors who give $5 or more will get a wristband inscribed with the word “Indivisible.”
Moody’s Analytics Chief Economist Mark Zandi said the fund will be helpful to small businesses having difficulty securing loans in a tough economic climate.
Starbucks, which is covering OFN’s administrative expenses and the cost of making the U.S-made wristbands, said every $5 donation to “Create Jobs for USA” will generate $35 in financing for small businesses, nonprofit groups, commercial real estate projects and affordable housing.
OFN Chief Executive Mark Pinsky said the group’s network of Community Development Financial Institutions (CDFIs) has been making as many loans as possible during the current recession, which has cost one in six American workers their jobs.
“Our hope is that this will help kick-start a whole different attitude about what’s possible,” said Pinsky, who added that his group’s CDFI loan portfolios are healthy.
Starbucks earned $945.6 million for the fiscal year ended October 2, 2010, according to financial filings. At that time, the Seattle-based company had about 107,000 U.S. employees.
Shares in Starbucks were off 1.8 percent at $36.61 in late morning trading, weighed down by concerns over Greece’s teetering finances.