Once considered a countervailing power to business, the U.S. labor movement has been in crisis and decline for decades. The unionized share of the American labor force peaked at one in three workers in the 1950s, but it has since plummeted to less than one in ten. Comparisons to other rich democracies also underline U.S. weaknesses. Not only does the United States lack the institutional conditions for a labor party to work in alliance with unions, American unions themselves encompass fewer industries and workers and are less centrally organized than their more powerful counterparts abroad.

How has the contemporary U.S. labor movement gotten into such dire straits? To answer this question, we must unpack underlying sources of vulnerability, two of which loom especially large. U.S. governing institutions play a major and regionally uneven role in structuring the rules of the game for labor-business interactions. And racial trends in the labor force, interacting with federal institutions and regional political differences, have exacerbated labor’s weaknesses.

Race in America’s Federal Political Economy

In the United States, both historically and today, political movements and decisions that channel market forces along racial fault lines have a lot to do with possibilities for unionists. Governments at the local, state and federal level all structure the rules of the game for the operation of labor markets and their participants, employers and employees. Because government legislation and rule-making matter, politics shapes much of what happens in the labor market. In turn, what happens in the economy and the labor market influences elections, interest group politics, and social movements. Alliances across racial lines can be enabled by the joint operation of politics and markets—as happened during the New Deal era, when mass production industries and national government regulations encouraged multi-racial union growth. But the opposite can also happen.

In the early twenty-first century United States, race figures into such dynamics in cross-cutting ways. The U.S. economic regime today is marked by the triumphant end of legally explicit racial exclusion and discrimination—that was the accomplishment of the Civil Rights movement—but also by rapid economic shifts away from manufacturing and mass production industries and toward a service-based, low-wage economy. In this economy, there are big de facto racial disparities in the jobs available and their pay and benefits. Consumer debt has grown, due to rising levels of job insecurity and stagnant, increasingly unequal wages.

America’s new labor market regime is best symbolized by the emergence of Walmart as the nation’s largest private employer. With a core business model focused solely on the mass retail of cheap consumer items produced abroad—and with employment practices drawn from the low-wage and anti-union traditions of the South—Walmart is emblematic of America’s 21st century post-industrial economy, just as General Motors, a huge manufacturing corporation, once symbolized the mid-twentieth-century industrial economy.

Although workers of all races have been adversely affected, the low-wage service economy has had an especially adverse impact on workers of color. America’s black and Latino workers hold lower-quality jobs and are subject to higher unemployment and lower wages and less generous benefits than their white counterparts. This contrasts sharply with the situation in the mid-twentieth century, where not just white workers but also many workers of color, especially African Americans, were heavily organized by the racially inclusive unions of the Congress of Industrial Organizations and enjoyed relatively stable employment prospects and decent working conditions. Wages and benefits offered many a clear superhighway into the U.S. middle class. But broad highways of opportunity no longer exist in today’s economy.

The Political and Racial Geography of Labor’s Prospects

What are the prospects for an inclusive and newly powerful American labor movement to revive the economic prospects and political influence of most workers? Right now, the answer depends on where in the vast United States we look, because immediate prospects depend on existing leverage in different regional political economies. Organized labor remains a force in many of the “blue” (that is, Democratic-leaning) coastal and midwestern states, but it is weak to non-exist in the southern states, where Confederate plantation-centered racial and economic regimes held sway prior to industrialization and where low-wage employment has remained the norm ever since. Areas outside the South are also unfriendly to labor, including some states in the Midwest like Wisconsin that may be shifting under conservative Republican governance.

In solidly Democratic-leaning states like California, New York, and Illinois, still-strong unions have been successful over the last twenty years in politically underpinned efforts to reshape low-wage labor markets at the local, regional and state level. Unions and their allies have pursued living wage ordinances and minimum wage increases, and have furthered “right-to-organize” regulations and agreements with businesses that allow union development. In politically amenable locations, the labor movement can be successful—even as national legislative protections sought by the unions remain stalled in Congress, blocked by representatives from states and regions where unions are weak.

Current islands of labor strength might not survive or grow, however. Their significance for the nationwide movement depends on how effectively and quickly unions can extend economic and political successes to the national level—and how adroitly they can bridge racial divides even as racial subsets of workers often face sharply different conditions. Thousands of workers of color have gained increased social protections and improved wages and working conditions through unionization and local labor market regulations. But can such gains be diffused and replicated in states and regions without much current union strength—or will racial divisions among unorganized workers in those regions continue to undercut American workers overall?

Most newly enrolled union members are women and workers of color. By building membership in Democratic-leaning blue states, America’s most vibrant unions are contributing to labor’s organizational and political renewal. Yet regionally circumscribed successes may also reinforce the limits to U.S. labor power—until and unless similar gains are more broadly achieved.