Nov 22, 2019

Tech's new labor unrest

Illustration: Aïda Amer/Axios

The tech industry was born largely union-free, but there are signs its long management-worker harmony may be ending.

Driving the news: Companies big and small have been making headlines more commonly associated with old-line manufacturing firms than tech giants.

  • This week, the New York Times reported that Google had hired an "anti-union consulting firm" as it navigates a rise in employee activism and protest.
  • A group of Google employees announced a rally Friday in San Francisco to protest the company's treatment of several activist workers.
  • Meanwhile, when Rev, a startup that farms out transcription work to freelancers, suddenly cut pay rates for its gig workers, they aired their complaint on social media and won an apology from the firm's CEO. (It helped that so many of their customers are journalists.)
  • Until recently, WeWork, the office-space rental giant, led the tech industry's "redefine work" crusade, but now, a wave of layoffs following a collapsed IPO is giving the company's employees a crash course in business realities. A group sent management a letter before the layoffs arguing that "employees need a seat at the table."
  • A union drive among employees at Kickstarter, the platform for artists to crowdsource project financing, has faced opposition from management.

The big picture: Silicon Valley's labor strategy has always aimed to replace the worker vs. management bargaining of the unionized industrial era with mission-driven, stock option-aligned unity.

Between the lines: That was always at best an aspiration, and at worst a fiction, but it helped keep large swathes of the tech industry union-free.

What's happening: Now several factors are opening big cracks in that model.

  1. Startups, where a handful of early employees often share camaraderie and generous options grants at low strike prices, find it easier to make the unity case. But mature public companies with tens of thousands of employees and vast profits can't count on mission statements or stock options to motivate workers.
  2. At the biggest, most successful companies, a two-caste system has evolved, with full-time employees enjoying lavish benefits while large armies of contractors get a much less generous deal.
  3. The rise of tech-driven gig economy platforms like Uber has given armies of workers freedom and flexibility but also stripped them of the rights and benefits employees have long enjoyed.

The catch: In each of these cases, an "in" group gets all the spoils, while everybody else gets a lot less.

  • The stock option system insures that early employees win much bigger than late arrivals.
  • At big companies, full-time employees win much bigger than contractors.
  • At gig-economy platforms, a small number of employees at the parent company win much bigger than the drivers, delivery people and other workers who use the platforms to find work.
  • All this inequality rankles in an industry whose mission statements are full of bold talk about "level playing fields."

The other side: Anti-union sentiment remains a powerful belief in much of the tech world, which sees organized labor as "friction" that reduces corporate agility and divides manager-employee teams. And labor organizing tends to come only slowly in industries like tech where pay and perks are competitive — typically, during downturns.

What's next: For decades federal administrative and legal support for labor has weakened. But if Democrats take the White House and Congress in 2020, that could shift — at the same moment that more tech workers are growing disgruntled.

Go deeper: Big Tech workers call out their companies

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