Welp, OK.
Let's take for granted that there was a labor movement in the US and let's also, arguendo, assume that it has been neutered -- as you colorfully describe. How did it get taken apart? Darned good question.
Let's preface this whole thing with a statement that there is no one answer. There are myriad answers and they all depend on point of view. I have a PhD in this stuff and usually take a semester or more to get to this question. I'm gonna take a middling road here because otherwise it would take weeks to write.
Short answer: it imploded on itself. The labor movement -- as popularly conceived -- could not withstand the external and internal pressures brought upon it by actors too numerous to list.
From the start (roughly the Knights of Labor,) the US labor movement has all sorts of identity problems. "Imported" ideas (mostly,) problems of gender inclusion, racial inclusion, skill level inclusion (see 'aristocracy of labor,') political identity (this one is huge,) and class-based v location-based v occupationally-based inclusion were all problems that kept the 'movement' divided -- to name but a few. From the KofL to the AFofL to the CIO, the US labor movement could not agree on who it was, much less a common set of goals. It could not coalesce. That inability to coalesce made the labor movement an easy target.
How was the movement (again, assuming that there was one movement) targeted by external forces? Mostly on political/identity lines. In the early 20th C, there were the Red Scares, this progressed to the open shop movement and the 'American' plans of the 1920s and '30s. During the Depression, the Wagner Act came along and mostly guaranteed the rights of workers to unionize. This held sway for a while, even during the shaky times of WW2 (wildcat strikes during wartime are generally frowned upon by those fighting the war.)
After WW2, things changed dramatically. Workers were still well-organized, but now, so too was 'business' (again, using a gross over-simplification creating a monolithic 'business class.') Groups such as the US Chamber of Commerce and the National Association of Manufacturers worked hard to promote the antiunion agenda. In 1947, the Taft-Hartley Act changed the face of union organizing. Employers would now get an equal (-ish) say in the union organizing process and union leaders had to sign anticommunist oaths. The anticommunism of McCarthy and others had become a national movement and opposing it was quite problematic.
Prior to roughly WW2, shop floor control was an important part of strike motivation. This was rooted in a socialist/communist ideal that the workers in a plant should have some say as to how it works. Oodles of strikes in many industries were rooted in this question of control. After WW2, strikes became less about control and more about wages and stability. Why? Again, complicated, but the gist of it is that soldiers returned home and wanted a peaceful, stable life so they could raise a family. So drastic was this change that when the UAW signed a contract with GM in 1950 that ceded control to GM in favor of defined wages and job security it was (and is still) called the Treaty of Detroit. Others will argue differently, but to me, this is the end of any meaningful labor movement in the US. Reuther and the UAW agreed with GM that it was their shop to run, so long as the workers were paid well. I'm not vilifying Reuther here -- I don't think he had much choice -- but I do think this was the coup d'grace for the movement.
So what? Well, now we have one of the largest unions in the US effectively changed from wildcatters and factory-seizers to what are known as 'rational self-interest maximizers.' no longer are they concerned with class-based ideas. They're looking for money and stability. And, frankly, I can't say that I blame them. In a post-war, heavily anticommunist, sort-of-antiunion milieu, they made a very rational choice.
Choosing to focus on one's own (loosely defined here) well-being rather than to work as a class- or even industry-based group led to the implosion of a group that wasn't well-tied-together to start with.
I'm omitting loads of stuff here, because I don't have time to write the 10K words this question requires, but I hope this conveys my belief that the labor movement died off mostly because it could not or would not hold itself together. If you have follow-ups, I'll try to get more specific.
Some suggested reading:
on the KofL see Leon Fink, Workingman's Democracy
On AFofL problems see David Montgomery, The Fall of the House of Labor and Julie Greene, Pure and Simple Politics
On racial inclusion problems, see Dan Letwin, The Challenge of Interracial Unionism and Eric Arnesen Waterfront Workers of New Orleans to name but two of the hundreds of works on the subject.
On open-shop and American plan, see Howell Harris, The Right to Manage, Sidney Fine Without Blare of Trumpets
On USCC and NAM efforts to promote antiunionism see E. Fones-Wolf, Selling Free Enterprise (a really outstanding work) Farber's Sloan Rules is also very good, if less union-minded.
On union political identity, see a library. There are hundreds of books on this. Examples include Halpern, Down on the Killing Floor, Storch Red Chicago, and Cohen, The Racketeer's Progress.
On the Treaty of Detroit, you can't beat Lichtenstein's The Most Dangerous Man in Detroit -- a great bio of Reuther.
To maybe expound on OP's question a bit more: Why did unionisation rates in the United States fall so much over the course of the 20th century, as opposed to the relative strength held by those in France or Germany?
Could you explain your question a little more?
Well to begin, I think it would be disingenuous to point to one event or time period where the labor movement in the US was, as you say, neutered. It is my opinion that there are many factors that led to the near complete destruction of labor in the United States that spanned nearly all of its history. These include the typical answers of conservative and business forces but also liberal forces, democrats, and even labor leaders themselves. The answer to this question could probably fill book (or two). Yet, I will narrow it down to one event that I have knowledge of which should serve as an example. Note, I am not arguing this is a defining moment in the near destruction of labor in the United States. This is merely one of many events in the ebb and flow of labor power and militarism that ultimately led to the ‘neutering’ of US labor.
This one event, again not a defining one, was the end of World War II and reconversion. It is often espoused that business and conservative forces remobilized in the wake of World War II and attempted to decimate labor. Yet, in my research, I found that liberal elements such as the Truman Administration and labor leaders themselves ended up harming the labor movement just as much or possibly worse.
Before and during the war the Congress of Industrial Organizations (CIO) "pioneered" an idea that labor, business, and government should work together on a national scale to strengthen the economy. This actually became the model during World War II when the government nationalized many industries to better produce for the war effort. This, if continued into peacetime, would give labor a prime spot to control its conditions and pay as well as a strong voice in the economy. I tend to call this labor-liberalism. Yet, the war ends and this idea is completely abandoned by the Truman Administration in favor of strengthening business. Furthermore, the idea is completely abandoned by the American Federation of labor (AFL) and the United Mine Workers (UMW). You can find a primary example of this opposition in “The President’s National Labor-Management Conference” which was held during November 1945 and well-documented. The problem was, many conservative segments of labor wanted to negotiate individually with their employers. This harkens back to the late 1800s and early 1900s where skilled workers controlled the trade in certain cities and could negotiate for high wages and better conditions. Of course, the economy in 1945 was changing rapidly and, in my opinion, to assume that they would have the same influence was foolhardy. So the idea of individual unions negotiating with the firms that they work for became an important post-war practice and a vast reduction of labor power. No longer could labor band together on a national scale to impact government policy because it became primarily about individual contracts.
The Truman Administration also played an important role during this era. I often wonder what would have happened in Roosevelt had survived to rule over reconversion.The Truman administration essentially protected business during reconversion with its tax policies. Though this sounds intelligent as there was fear of a mass unemployment following the near 100% employment of the war, The CIO argued that these policies completely empowered business and did nothing to help working people. Truman wanted business to continue producing and people to become better consumers. If he could protect business long enough then people can consume and jobs would be protected. Of course, Truman’s economic policy did not account for working people or the labor movement as it was too preoccupied with production and consumption.
In the end, reconversion was an important neutering of labor power. It is not the only one and it is not the most important one but it is one that shows how labor in the US was undermined from within as well as without. If you want me to clarify anything please ask as I tried to condense a forty page graduate paper into several paragraphs.
This is a very broad question and there could be very in depth and thorough responses about several major turning points in the history of labor relations in the U.S. However, I will try to provide an overview to answer your question but still gives the thorough answer this sub deserves. First, there are four major schools of thought when it comes to labor relations. These four schools of thought have different views on where labor or employment issues stem from and how they can be addressed.
The first, and dominant school of thought in the U.S. is the mainstream economics school of thought, which is aligned with capitalism and basically believes that the market will work it all out. You do see this ebb and flow in labor relations. When unemployment is low, labor has more power as employers must compete for talent and when unemployment is high, employers have the power as there are more workers than jobs. This ebb and flow has been semi-consistent in about 20 year cycles further reinforcing the market or capitalism theory of labor relations.
A more recent school of thought but one that is gaining a lot of popularity as the U.S. is switching to more of a service and skilled labor economy is the Human Resources Management theory of labor relations which basically posits that if you use good human resources management you can take care of employees and their needs and there is no need for a union. You see this type of approach in companies like Google, Netflix, and Microsoft now. This used to be called the Personnel Management school of thought and focused on the belief that labor issues resulted from poor management.
The third school of thought is the Industrial Relations school which argues that unions are needed to balance the bargaining power between employees and employers. This is the school of thought that supports the creation and strengthening of unions and gained popularity at the turn of the 20th century and grew throughout the first half of that century.
The fourth school of thought is the Critical Industrial Relations school of thought, which used to be called the Marxist industrial relations. This was a more extreme version of the industrial relations that thought unions were necessary but that the bigger issue was capitalism itself. This school of thought is more rooted in socialist and communist theory and is much more prevalent in Europe.
Now that we understand the differing perspectives, let’s examine the purpose or goal of labor relations. It basically centers around three main points: efficiency, voice, and equity. Employer’s main concern is efficiency and labor’s main concern is voice and equity. The purpose of labor relations is to balance these three issues because employees that feel they have a voice and are treated fairly (equity) are generally much more productive and efficient. However, there is always conflict where employers may feel that too much voice or equity interferes with efficiency or labor feels too much focus on improving or increasing efficiency is coming at the cost of voice or equity.
Now that the labor relations issue and theories concerning it have been covered, let’s look at the history of labor relations in the U.S. starting with the industrial revolution when a lot of these factors became prominent. Initially, the employers had all the power. Working conditions were very poor, wages very low, and employees had no say in anything. In this instance, labor had no voice or equity and employers were solely focused on efficiency, producing the most product possible in the shortest and cheapest way possible.
Employers help this power position up until the 1930s, mainly because the laws were on their side. The primary factor in this is that property law is a major facet of common law, which was the only source of employment law initially. Labor had no recourse when treated unfairly or harshly by employers. However, the massive abuses that occurred in the 1880s through 1930s had two major effects. First, it caused workers to begin to organize and to form unions in an attempt to gain voice and equity. Labor saw that the mainstream economics school of thought was not working for them and tried to move to the industrial relations school. Employers resisted this heavily and had property law on their side in a lot of cases. In the other cases, they used their wealth and influence to get local, state and even federal judges and legislators to support employers and their property rights. This led to some very serious and even fatal clashes to break strikes during that 50 year span.
However, following the Great Depression, there was a realization that labor relations needed to change. It took several years but finally in 1930s the federal government began passing employment laws designed to try and balance the power struggle between labor and employers. 1935 saw the passing of the Wagner Act, which would come to be known as the National Labor Relations Act and is still the bedrock of labor relations law today. The Wagner Act gave unions the right to organize and strike, prevented employers from interfering in these activities, and required employers to recognize unions and collectively bargain with them. It also created the National Labor Relations Board, a federal agency to adjudicate labor relations issues. Despite being passed in 1935, many employers and even local and state courts attempted to resist and undermine the Wagner Act and it wasn’t until the Supreme Court upheld the Wagner Act in 1937 that it really began to provide labor with more power.
Just a mere 10 years later the Taft-Hartley Act was passed, which was designed to temper some of the power given to employers with the Wagner Act. While the main provisions of the Wagner Act remained, the Taft-Hartley Act limited the length a strike could last and created unfair labor practices for labor. The Wagner Act had only identified unfair labor practices for employers. The Taft-Hartley Act also gave employers more rights to peacefully and legally resist unionization such as the right to address employees and speak out against unionization. Further, the Taft-Hartley Act limited the scope of what had to be collectively bargained and allowed states to pass right to work laws.
There were a few other major laws or court decisions following this but this was mainly the end of employment law on the collective or union level. In the 1960s, coinciding with the civil rights movement, employment law began to be passed independent of union or labor relations law. Provisions such as Title VII or the Civil Rights Act (equal opportunity employment), the Americans with Disabilities Act, the Family and Medical Leave Act, the formation of OSHA, and others were the major employment law changes and they gave workers a lot more protection (equity) and say (voice) in labor relations without giving anything to unions. At the same time, unions were gaining a lot of negative publicity due to the involvement of organized crime and strikes and other actions that many in the public saw as greedy or unnecessary.
So with that brief history and theory of labor relations in mind, how does it apply to your question about the decrease of the labor movement in the U.S.? Well, in several ways. First, unions have always fought an uphill battle in the U.S. due to the dominance of capitalism as the prevailing economic theory. Second, the laws have mostly favored employers beginning with the focus on property laws and even when labor gained some ground, it was quickly tempered just a short 10 years later. Third, the shift to focus on employment law instead of labor law in the 1960s provided workers a lot of the rights and equity that made it so unions were not as valuable to them for basic protections. I’m not saying that unions could not provide other protections and benefits, just that some of the basic protections were provided regardless of union affiliation now. Fourth, the negative publicity really turned the public against unions in the 1980s and 1990s.
This is not meant to be an argument for or against the effectiveness or utility of unions, just an overview of the theory surrounding labor relations and the history of labor relations in the U.S. Today, unions account for about 20% of the U.S. workforce; however, a majority of the unionized workforce is in the public sector as opposed to the private sector. This is actually on par with a lot of other countries in the world, outside of Europe, who has a long history and legislative ties to unions support. Also, just to show that laws aren’t enough and the culture and economic theory of a country is just as important, Mexico has some of the toughest and most pro-union laws in the world and yet has some of the worst labor relations because many of those laws are not supported or upheld by the government.
Sources
Labor Relations: Striking a Balance by John W. Budd
Employment Law for Human Resources Practice by David Walsh
Collective Bargaining in the Private Sector by John Delaney
I think it would be a disservice to Unions and their lasting effects to say they were 'neutered'. The original goals of Organized Labor remain (in the United States of America). Those primary goals have been largely fulfilled and the secondary purposes have expanded into a National Stage. (pay and compensation in regards to cost of living)
Just to name a few. Workers were fighting against systematic exploitation of working individuals, poor pay, and high mortality rates. While those issues are still important, at turn of the 19th century, in the public's and American government's eye, they were not. Organized labor brought these issues into public awareness and gave workers a voice in what happens in their work, trade, welfare, and pay.
/u/ThatDamnCommy is correct in saying that Unions saw a waning of power after World War II in the United States, but I the powers that were removed had more to do with Political and Financial influence. Also, 26 states in the USA have what are known as Right-to-Work laws, which are also considered a weakening of Union Power since the major of the laws deal with the collection of compelling of Union Dues.
However, to this day, Unions are still important in setting work standards for safety, training, and policies regarding workers. I think the argument could be made the labor and workers in the United States have moved far away from skilled trades and manufacturing to a more knowledge and service based industry. Which itself calls for a different type structure when dealing with Organized Workers and Labor.
Sources: There Is Power in a Union: The Epic Story of Labor in America Dray, Philip; History of the Labor Movement in the United States: Industrial Workers of the World; Foner, Philip S.; US Department of Labor, https://www.dol.gov/