Starbucks has offered to pay their staff’s university fees – and it will have a bigger knock-on effect than you think

When Starbucks offers a university education for most of its employees for free, you know something big is afoot.

Firms in the US and indeed the UK have long helped to pay for university for selected students, the idea being that they then go on to work for the company. It is a recruitment tool. But this scheme is bigger in scope and different in aim.

It is bigger in that it covers 140,000 of the company’s 191,000 employees, and it is different in that it seeks to improve the life opportunities of young and underprivileged workers. Now it is being extended to workers in the UK. If it is a success, expect many more companies to follow suit.

This says something really important about higher education more generally. In the first instance, who should pay for it? But also, are its costs too high and could technology be used to cut them? Is it designed to fulfil the changing needs of young people? And so on.

Different countries have different answers, and while all struggle, at least we can learn from each other. There is an excellent summary of the future of education ranking here by the pioneer of international comparisons of education systems. But let’s focus on the “who should pay for higher education?” question, because that is the immediate issue.

An economist would look at who benefits. Since these are split between the individual (who earns more) and society as a whole (because a better-educated workforce lifts everyone’s living standards) there should be some mix between the two.

Continental Europe, to generalise, puts most of the cost onto taxpayers. But that has squeezed the money for higher education, with the result that no EU university is in the world’s top 30 on the main rankings. The US and UK put more of the cost onto students, with the result that students leave college with huge debts. Another source of funding is clearly needed.

That is where companies can step in. But why should they? The answer comes in two parts, illustrated by this Starbucks initiative.

One is that better-educated employees improve the quality of service and, in theory, at least, that should show through to the bottom line. Companies have long acted in this way, for recruitment as noted above, but also because productivity is higher.

The other is that companies prosper in a harmonious society. This wider objective is implicit in the way the company presents the programme and while it is easy to be cynical about such objectives, I think that is wrong. The Victorian entrepreneurs – such as the Cadbury family and the Lever brothers – who pioneered worker education were onto something.

There is, however, a further element of this programme that seems to me to be its most important contribution. It is filling one of the huge gaps in the education system: the need to give people who miss out on university education a second chance to get one.

In a world where credentials matter more and more, people need to get through a series of hoops to have successful careers. One wrong choice, one failed exam, or one sudden blow can blight people for life. The fact that someone can do a job may count for little if they don’t have the right bit of paper that says they can. The path to that bit of paper is often, too often, a university degree.

Of course the average barista is probably not going to race off and become a brain surgeon. There are some life decisions that young people make that will not be changed by topping-up their education later. But what Starbucks is doing is a patch, and a useful one, for people who feel they have missed out on a university education.

These are online courses; you don’t get the camaraderie of university life. This, however, is not about lifestyle, it is about personal fulfilment. If it also helps Starbucks to run a better business, that is all to the greater good.

The big question is whether more business involvement can become a material help in funding higher education. Up to now, most of the support has come in research funding, because universities do research than benefits the business community. Nothing wrong with that. But this is something more. Other employers would do well to copy this.