The Case for Unionization of the Knowledge and Gig Economy Firm Employees

Why Knowledge and Gig Economy Workers have not been unionized yet?

Unlike the Manufacturing Sector Firms that are heavily unionized and where the workers in such firms belong to formal and informal as well as recognized and unrecognized unions, no such unions are present in the so-called Knowledge Economy and Gig Economy firms.

Typically, the rationale proffered by the Owners of such firms and the Government and the Judiciary is that Knowledge Economy firm employees are White Collar Professionals who are protected by elaborate contracts and other terms and conditions of employment which obviates the need for more protections from the Unions.

In addition, the justification for the absence of Unions in the Services Sector is that the employees of such firms have Signed Up for explicit terms of employment or in other words, they are getting what they have asked for.

Moreover, many services sector firms discourage unionization of the workforce as they believe that they would go the way of manufacturing firms which are often beset by strikes and lockouts and in rare cases, violence and other forms of malicious behavior from the unions that renders them dysfunctional and non competitive.

Thus, the arguments given by the various stakeholders are that unions are simply unworkable and infeasible in the services sector.

The Case for Unionization of the Knowledge Economy and Gig Economy Firms

Having said that, in recent years, many influential experts, and other voices from various sections of society have been calling for a limited unionization of the knowledge economy and gig economy firms.

The central point of their argument is that with the firms in these sectors (especially the software and the financial sector firms) being around for more than three to four decades, it is time for them to embrace formal unionization as they matured to a point where their employees need to be protected against arbitrary firing and downsizing as well as shielded from the ill effects of paring down of social security, healthcare, and other welfare oriented benefits.

In other words, the key contention is that when the state as well as the capitalists are not taking care of the workers in these firms, it is moot and fair to include them into unions so that they have the protective layer of Collective Bargaining which would act as a safety net in the absence of such benefits from the other stakeholders.

To use a colloquial expression, when no one has your back, it is better for you to unionize so that at least you are assured that someone is looking after your interests.

The Specific Case of the Gig Economy Workers

Another reason why the topic of unionization has become so important is the emergence of the Gig Economy in recent years.

Compared to the Knowledge sector firms, Gig Economy workers and professionals do not even enjoy the stability offered by full time employment and the reassurance that they would not be living a hand to mouth existence wherein their next meal is dependent on the last gig that they have done.

Moreover, even without the protections of a monthly salary and no coverage for illness and other downtimes, the gig economy workers are also turning into the Precariat class of workers where their positions is so fragile that their whole lives and ways of living become precarious.

In addition, the gig economy firms such as Uber have been having a Free Ride (literally as well as metaphorically) by solely existing for rampant profit seeking and Zero accountability.

Indeed, look at any case involving the Gig Economy firms and one can see how the firms absolve themselves of any responsibility and accountability and place the blame on the workers. In such cases, it is a legal, ethical, and moral responsibility of societal and governmental stakeholders to extend their helping hand by letting them is unionized.

Examples from the Real World and Cases

In recent months, there has been several news worthy incidents that are pointing to a slow realization among all stakeholders that it is time for workers and professionals in the Knowledge and Gig Economy firms to be unionized.

One such case pertains to the United Kingdom where a court ruled in favor of the Gig Economy workers to be unionized.

In addition, there is a Class Action Suit that is going on in California in the United States which is grappling with this and other issues fundamental to how Gig Economy firms operate.

Further, in India, there is already a significant body of opinion that leans towards unionization of these sectors.

Above all, the incidents of employee activism at Google in recent months points to how there is a worldwide trend towards unionization of the workforce in the Knowledge and Gig Economy firms.

On the other hand, there is also the realization that one must proceed after Due Diligence lest one makes the same mistakes as the unions in the Manufacturing sector made when they went too far at times.

Therefore, it can be said that we are learning the lessons from history as we move towards unionization in the Services and Gig Economy sectors.


Lastly, history also offers some broad hints on how the directions of such movements work. Just as the Industrial Revolution gave rise to a Social Contract between the owners and the workers, it is time for a New Social Contract with the emergence of the Fourth Industrial Revolution underway.

This has also been discussed at forums such as the Annual Davos meet where the business and political elite gather to provide new directions for all of us.

To conclude, there is a case to be made for unionization of the Knowledge and Gig Economy workers.

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Economics of Human Resources