> Graduate students are students. They are paying to be in school. They may be paying for it with money gained from the University but they are still students. Should an undergrad that is on a university scholarship be considered an employee too?

It depends on what they're doing. If they're expected to help with the teaching, instead of doing their own research, they're absolutely employees.

If they're purely doing research, then I agree this shouldn't be covered by the unionization.