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Starbucks’ Tuition Reimbursement Is Profoundly Depressing

The new Starbucks deal might seem like a win-win, but it's really just part of Howard Schultz's political agenda.

The announcement that Starbucks would offer all of its 135,000 employees $10,000 worth of free education at Arizona State University has crowded out a lot of really depressing news about the state of public education. Whether it's California's Supreme Court ruling that teacher tenure is unconstitutional or the Common Core marching on in spite of Diane Ravitch's relentless exposés, people were looking for some good news to counter the incessant chorus of voices insisting that American education is in a crisis.

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Under the program, the full details of which can be found on Starbucks's site, freshman and sophomores will receive $1,267 outright toward their tuition each semester, while juniors and seniors will receive $2,420, and the company pledges to reimburse the balance for any employee who completes at least 21 credits. They don't have to stick with the company after graduation, but presumably, as Natasha Lennard observed, they can't quit while they're still in school.

Like fellow Seattle-based company Costco, Starbucks is known for paying a pretty decent wage to its workers, providing genuine, accessible benefits, and—unlike that other Seattle-based company that killed all the bookstores and now has a phone—not generally treating them like fungible units it can't wait to replace with servile robots. So this has been greeted as a good thing in some quarters, a direct pipeline for the quintessential strivers of the underclass straight into the American dream.

Howard Schultz, CEO of Starbucks, can't really be mapped onto the liberal-conservative American political spectrum too easily. His closest political approximation might be Mike Bloomberg. Schultz grew up in public housing, his company sells fair-trade beans, and he doesn't want people bringing their guns in while they get a Frappuccino. Although left-of-center as far as billionaires go, he's a strong supporter of Israel's conservative government and also one of those very rich people who's convinced that the national debt is America's most grievous problem, once piously refusing to donate any of his vast fortune to either political party until a comprehensive debt deal emerged from Congress. (Remember Schultz's campaign, circa Christmas 2012, ordering baristas to write "Come Together" on coffee cups, until that pesky debt thing went away? It sounded anodyne, but the specter of a billionaire compelling his minions to cheer for austerity was peculiar.)

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That burst of activism rankled New York Times columnist Paul Krugman, who noted that Fix the Debt was really a propaganda tool for corporate titans worried about the prospect of a fairer tax code, masquerading as a neutral proposal no one could possibly be offended by. Schultz's main anxiety at the peak of the debt hysteria seemed to be that both political parties were equally to blame for not coming up with solutions for the deficit, and their dysfunctional stalling would lead to higher interest rates, inflation, and widespread unemployment. As someone who positions himself as a benevolent father figure of sorts to his army of young employees, Schultz saw reason to tut-tut about Washington's incompetence and presented himself as having the moral stature to do so. The economic horror that was 2009 was still fresh in the minds of people whose unemployment ran out—many of them college-educated professionals who, as the cliché has it, were sucking it up and pulling shots just to make ends meet.

However genuine Schultz's personal sentiment was, Fix the Debt was funded by corporate cash—lots of it—and existed basically as a vehicle to do two things: to advocate for cutting Medicare and Social Security, and to stir up fears that a debt catastrophe was imminent if we didn't. By muddying the debate and pumping up a we-must-kill-these-programs-in-order-to-save-them approach, Krugman argued, Fix the Debt hoped to ram highly unpopular entitlement cuts through Congress. Fortunately, it was a maladroit political operator and has dropped off the scene.

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But Starbucks's new education proposal is of a piece with Fix the Debt. More to the point, as it becomes clear that those awful debt proposals are dead in the water, education has become the new cause celebre among meddlesome billionaires. Common Core is largely funded by the Bill and Melinda Gates Foundation, and the lawsuit overturning tenure in California was a pet project of Students Matter, which is bankrolled by Silicon Valley tech entrepreneur named David Welch (who, in fairness, is affluent but not quite a billionaire). It's almost as if these ultra-rich people are all friends and convene annually to chat about where and when to intervene in public policy debates, to make sure the outcomes suit them.

Rather than advocating for the expansion of Pell Grants or better regulation of predatory student loans—fairly common-sense proposals with strong popular support—Schultz's priority is to make sure that anything that gets done jives with the prerogatives of the .01 percent. Through conspicuous displays of enlightened corporate civics, CEOs make sure that all fixes to America's problems go straight through them, bypassing any unreconstructed liberal dinosaurs in the government who might propose, say, higher corporate taxes to fund higher education, or restrictive rules on just how much Sallie Mae can gouge recent graduates. It's textbook neoliberalism, softened a bit to make it more palatable by wrapping it in largesse, and technically, Starbucks isn't actually shelling out a dime; Arizona State is offering discounts. Considering that online courses are riddled with commercial ads and retention rates are very low, the entire enterprise sounds more like co-branding or synergy than anything else.

Americans seem to accept that elite private schools are more or less non-meritocratic institutions designed to perpetuate the existing power structure by charging exorbitant tuition. Four years at Sarah Lawrence will run you a quarter-million dollars, which happens to be 12 years' worth of 40-hour weeks at $10 an hour, before taxes. But how grim is it that higher education at a state school is slipping away from the people for whom it was specifically designed? What Starbucks is tacitly admitting is that America's class divide is so vast, it has become increasingly impossible for most people to get ahead in life without extra help from one of our overlords—even if they already got a coveted slot at one of the kinder, gentler Fortune 500 companies. Against the backdrop of giant retailers like Amazon and Wal-Mart, which actively steal their employees' wages, Starbucks does seem far-sighted, but Schultz is just as opposed to unions as Jeff Bezos or the Waltons. So it's not about empowering people to take charge of their lives. Schultz and people in his income stratum alone get to make the decisions about how life's gonna be. That's why they're CEOs.

There's another structural issue as well. This proposal comes largely in the form of reimbursements, which are better suited to the middle class. The racial disparities in the reconstruction of post-Katrina New Orleans are a case in point. White middle-class residents who could pay out-of-pocket to rebuild their houses and wait for FEMA to make good on its promise recovered much more quickly than their poorer, largely African-American neighbors who couldn't shell out the cash up front. Starbucks is potentially driving a wedge between its relatively better-off employees and the rest—or, at least, the ones whose lives make it possible to work and study at the same time, and those who can't. As the Affordable Care Act was a boon for health insurance companies who got a gift in the form of millions of new customers, so too is this proposal an implicit bonus for student loan companies, the likeliest place aspiring students will turn to cover the difference between what Starbucks is offering and the full tuition. And if there's one true crisis in American education, it's the trillion dollars student loans people owe.

Hopefully, tens of thousands of Starbucks employees will take advantage of ASU's online programs, study what interests them, and go on to derive meaning and pleasure out of the work that they do. But it doesn't change the fact that the average American's ability to chart his or her own destiny in life has gone down at the same rate as billionaires' power to control everything has gone up. It's just that some of them are nice sometimes.

Follow Peter Lawrence Kane on Twitter.