As I did in another question, I'm going to be leaning very heavily on Roots of Reform: Farmers, Workers, and the American State 1877-1917 by Mildred Elizabeth Sanders. It's really so, so, so, so good. Read it if you have any kind of interest about agrarianism, labor history or reformism.

To answer your question in simple terms, the easiest answer is that every major independent labor party failed to attain major party status, and eventually the prospect of an independent labor party altogether faded. The more complicated answer deals with the intersection of Agrarian reform interests and Labor reform interests, and how different Labor organizations dealt with political involvement. Most notably, the difficulties labor organizations faced when confronting the already held partisan allegiances of different workers.

The Knights of Labor were really the first major national labor organization in America, and the KOL had it's roots in the revival of trade unionism in Postbellum America. The KOL relied on local 'district assemblies,' and importantly grew from the 'bottom up.'

The program enunciated by [KOL] leadership conceived of a society as divided between the "producing classes" of workers, farmers and small manufacturers and an emerging parasitic and exploitative class of financiers, speculators, bondholders and monopolists who were steadily appropriating a larger and larger share of wealth created by producers. To counter the exploiters, the KOL hoped to build worker solidarity across craft lines and to cooperate with other producer groups, particularly the more numerous farmers (pg 33).

The KOL was initially apolitical, and while it refused to back any one party, it supported workers political education and the like. The "Great Upheaval of 1877," a wave of strikes originating in the railroads often considered to be the country's first national strike, the KOL got more involved in national politics with the influx of new members.

However, the most important political feature of labor politics was 'Greenbackism,' essentially supporting the shift to a fiat currency (closely related to 'Free Silver' or 'Bimetalism,' which supported adding silver as a backing for currency), the goal of which was to free up credit for small farmers in traditionally capital-choked regions, especially the rural periphery and most significantly the South. However, Greenbackism was backed quickly by major labor leaders.

[Labor activists] came to believe that the workers' well-being -- indeed, the prosperity of "producers" generally -- depended on low interest rates and a steady expansion of the currency to meet the needs of a growing population and commerce (pg 35).

This overlapping policy proposal between Agrarian activists and labor activists, as well as the KOL and national farm organizations like the Grange, boded well for the seemingly natural farmer-labor coalition of 'producers,' and thus the Greenback-Labor Party, alongside other smaller independent labor parties, popped up in local and state elections across the country in 1877, and the akkuabce if 'producers' garnered over a million votes in state and Congressional elections in 1878. However, most notably, this success was largest in agrarian, as opposed to urban areas, and 1878 would be the electoral high point for the Greenback movement. The enthusiasm of major labor leaders waned, and the KOL ultimately made little effort for subsequent Greenbacker presidential tickets.

Commentators have suggested that the lifting of the depression in the fall of 1880 and the nomination of Iowan James Weaver rather than Gen. Benjamin Butler of Massachusetts contributed to labor's disenchantment with Greenbackism [...] at any rate, the falloff of labor support left the agrarian Greenbackers high and dry (pg 37).

The KOL soon turned most of it's attention to membership growth, which over time would move the center of KOL gravity from the urban labor cities to the agrarian periphery, and by the late 1880's, membership was plummeting and most labor organization growth was in the AFL. The KOL would degenerate (or evolve?) into a mostly agrarian organization by the 1900s.

The AFL was a far different beast than the KOL. Less inclusive, far less political, more focused on craft trade unionism and less receptive to lower-skilled workers, the AFL was praised in the short term for surviving the upheavals of the era better than the Knights, but in the long run the costs of near-complete apoliticalness were well acknowledged, and denounced, by plenty of labor historians. I'll source right from Sanders:

Early-twentieth-century scholars, impressed by the AFL's persistence through the depression of the 1890s and persection at the hands of trusts, employer's associations, and the state, considered the AFL's strategy a great improvement over that of the Knights and the Socialists. Trade-union leaders such as J.p> McDonnell of the NJ Federation, and P.J. McGuire [...] developed a restricted workplace militancy that produced a better fit with both the American worker's psychological dispositions and the limitations imposed by the external political and economic environment [...] A later generation of Labor Historians would excoriate the AFL leadership for taking labor out of the ranks of progressive reform, devoting it's energies to the service of an elite group of skilled craftsmen, and ignoring the mass of unskilled workers. Even those sympathetic to Gompers's "common denominator" argument - that a commitment to trade unionism represented the strongest tie binding workers whose long-standing partisan attachments and issue positions could only pull them apart in politics - have argued that he pushed the denominator too low, overly constricting the scope, political power, and legitimacy of the labor movement (pg 73).

TLDR, basically, the AFL's precepts (roughly known as 'voluntarism') pulled labor out of the progressive coalition, and the AFL marginalized itself in national politics throughout the era. One more long quote:

The point of mounting an independent political effort (which might imply support for its old antagonists, the Socialists) or endorsing Democratic or Republican candidates was to obtain legislation. But the American courts had ordained that federal law could not constitutionally touch many areas of labor relations. This meant that labor had to conduct legislative campaigns in a multitude of states - which had reason to compete for industrial locations by denying labor claims [...] it made sense, then, to propound a doctrine of economic self-help. Unions should confront business in the workplace and obtain their goals by collective action there (pg 74).

Most importantly, because the AFL refused to involve itself in national politics, local chapters or local unions could more easily align themselves with sympathetic local parties - the AFL could be Democratic in a Democratic city, or Republican in a Republican City. While this did achieve some small results, it ultimately doomed the chances of a real Labor party - mainly because the AFL survived, the KOL didn't and the Democratic party essentially claimed the mantle of national reformism from the late 1890's onwards.

Citation: Roots of Reform: Farmers, Workers and the American State 1877-1917 by Professor Elizabeth Sanders

Hey there,

Just to let you know, your question is fine, and we're letting it stand. However, you should be aware that questions framed as 'Why didn't X do Y' relatively often don't get an answer that meets our standards (in our experience as moderators). There are a few reasons for this. Firstly, it often can be difficult to prove the counterfactual: historians know much more about what happened than what might have happened. Secondly, 'why didn't X do Y' questions are sometimes phrased in an ahistorical way. It's worth remembering that people in the past couldn't see into the future, and they generally didn't have all the information we now have about their situations; things that look obvious now didn't necessarily look that way at the time.

If you end up not getting a response after a day or two, consider asking a new question focusing instead on why what happened did happen (rather than why what didn't happen didn't happen) - this kind of question is more likely to get a response in our experience. Hope this helps!