Starbucks CEO backs minimum wage raise

March 20, 2014: 9:45 AM ET
Starbucks CEO backs higher minimum wage
NEW YORK (CNNMoney)

Starbucks CEO Howard Schultz supports raising minimum wage. And he doesn't expect it to raise the cost of your cup of coffee.

"I applaud the President for taking a stance on raising the minimum wage," he told CNN's Poppy Harlow in an interview.

But Schultz, known to donate to Democratic candidates, stopped short of saying whether or not President Obama's push to raise it to $10.10 is the right number. And he warned of "unintended consequences" of a hike.

"Would we have to raise prices? I don't think so," Schultz said. He also wouldn't say whether or not Starbucks (SBUX) would cut jobs if the federal minimum wage was raised significantly. "I would hope not," he said.

All of Starbucks' 200,000 employees make more than $7.25, the current federal minimum wage. Many receive health care and retirement benefits.

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"We may not be able to afford to provide all the benefits if we had to go to $10 an hour," he said.

Obama has signed an order mandating that any businesses with federal contracts pay workers at least $10.10 an hour starting in 2015 and has urged Congress to do the same for all workers. Many states and cities have taken matters into their own hands and increased minimum wage at the local level.

About 1.6 million workers earn $7.25 today, according to the Congressional Research Service. Advocates say a minimum wage hike could reduce income inequality but critics say it could raise prices and lead to job losses.

"I do think there ... is a larger gap between the haves and have-nots in America," Schultz said.

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