When on holiday in Nashville, I noticed that Kroger is actually a union shop, and my grandfather-in-law is a trucker and in the trucker's union which has ensured he has decent conditions, pension, benefits, etc. So it's not like Unions are that uncommon. I'm not sure they're really less powerful or have less members than in some European countries. Yet overt anti-unionism seems to be more of a thing in American politics than in Europe.
I'm not a historian, but I have worked in organized labor for the past 10 years at every level (national, state and local), and I'd consider myself a student of labor history. These are two separate questions, and they aren't as related as you might think. I'll answer them in order of complexity.
The answer to this is fairly straightforward: because labor racketeering has historically been a major issue for the labor movement for as long as there has been organized crime. John Lewis, the former president of the United Mine Workers (1920-60), once observed that "Labor, like Israel, has many sorrows." He was referring to the long history, even then, of corruption and racketeering that has plagued the American labor movement. David Dubinsky, the former president of the International Ladies Garment Workers Union (1932-66), called labor racketeering "a cancer that almost destroyed the American labor movement."
First, some definitions. "Labor corruption" refers to the misuse of union office and authority for personal gain. "Labor racketeering" refers to labor corruption committed by or in alliance with, organized crime groups. To be clear, labor unions, and the labor union membership to be specific, are the victims of labor racketeering.
Labor racketeering really became an important revenue stream for organized crime groups with the repeal of prohibition in 1933. The International Longshoreman's Association, for example, was thoroughly corrupted in the 1950s, with union bosses forcing longshoreman to make payoffs to work, and shippers having to pay to have their cargo unloaded. If you haven't seen On the Waterfront with Marlon Brando, I'd recommend it, because it's a fantastic movie and a brilliant dramatization of the dynamics of labor racketeering at the ILA during this time period. It was based on Malcolm Johnson's 1949 Pulitzer Prize winning series in the New York Sun, "Crime on the Labor Front."
Labor racketeering really received national political attention for the first time during the U.S. Senates 1950-51 Kefauver hearings. These hearings led directly to the passage of the Landrum Griffin Act in 1959, which sought to protect unions from organized crime penetration by banning persons with criminal records from union office, making embezzlement from a union a federal crime, and imposing reporting and disclosure requirements on unions, etc.
Arguably the issue captured the popular imagination during the 1960s, when Jimmy Hoffa was president of the Teamsters. He was at the apex of his powers during this time, having negotiated a National Master Freight Agreement that covered all over-the-road truck drivers in North America. Hoffa was also thoroughly corrupt, and was involved with the Mafia from the early years of his Teamster work. When Robert Kennedy became US attorney general in 1961, he made the prosecution of Hoffa his number one priority. This was successful, but Hoffa was pardoned by Nixon in 1971 and began campaigning to regain his leadership position despite his 15 year ban under the terms of his pardon. Hoffa "disappeared" in 1975, presumably the victim of a mob hit. Labor and the mafia were now inextricably linked in the public imagination.
This was also the apex of organized crime's influence in organized labor. Hoffa's 1964 prosecution partly involved his receipt of kickbacks in exchange for making benefit fund loans. Organized crime's plundering of union benefit funds was one of the leading factors that led Congress to pass ERISA in 1974, which gave the Department of Labor authority to investigate pension and welfare funds. In 1980, Senator Sam Nunn held hearings on the Teamsters, Longshoreman, Laborers, and Hotel and Restaurant Workers, revealing widespread looting of pension and welfare funds by labor racketeers connected to organized crime. RICO, which was enacted in 1970 to combat organized crime, began to be used to purge the racketeering influence from mobbed up unions beginning in the 1980s.
A prominent example occurred in 1988, when Rudy Guiliani, then the US attorney for the Southern District of New York, filed a civil RICO complaint against the Teamsters, the Cosa Nostra "commission," twenty-six Cosa Nostra members, the Teamster's general executive board, and eighteen present and former members of the general board. The government settled the case with a consent decree, which barred the union defendants from any future involvement with the Teamsters and most importantly required the selection of three court appointed officers to oversee the union's reform. By 1998, James P. Hoffa, Jimmy Hoffa's son, ascended to the Teamster's presidency on an anticorruption platform, and by 2002 an independent commission found no indication of organized crime influence in the vast majority of previously tainted Teamster locals, and in the locals where questionable influences still existed, investigations and disciplinary proceedings were already under way.
I focused on the Teamsters because they were the most prominent example, but a similar process played out amongst all of the major labor unions in the US. Today organized crime controlled labor racketeering has largely faded into the rearview, and most labor corruption is the result of dishonest individual officials unconnected to organized crime. However, the perception of labor unions as being in bed with organized crime will take much longer to wear off, assuming that there is still an organized labor movement of any note in this country in the medium to long term. Which brings me to question number 2, which I will address in a separate post soon.
Sources:
I’ll touch on the organized crime bit, which I think also goes into the popular political demonization of unions in the US. To start off with, I would argue that organized crime became associated with unions that specifically exhibited inequality and low levels of democratization- essentially when there is a large gap between high-ranking union officials, and the rank-and-file, there is a higher likelihood that the union will become corrupted.
My research has focused primarily on the International Longshore and Warehouse Union (ILWU), which organized dock workers along the West Coast of the US. They serve as a particularly good foil to the ILA, which is a more conservative AFL union organizing dock workers generally on the East Coast, and has had associations with corruption and organized crime in the past. The ILWU, organized in the 1930s under the leadership of the leftist Harry Bridges, set up a union that placed high importance on rank-and-file being allowed to have a say in union decision making, and set up democratic mechanisms within the union to ensure they were able to voice their opinions to leadership. The hiring hall was established to ensure the fair distribution of work. This was an issue in the ILA, without a fair dispersal of jobs, workers were disempowered and jobs went to those who supported (or at least complied) with the strong union leadership and the organized crime they associated with.
In terms of public perception of unions, during the Great Depression, we see an upswing in unionization- specifically industrial unionization. It was during this era that the CIO (Congress of Industrial Organizations) is formed in 1935. It is important to note that industrial unions and the CIO were, for the most part, more leftist than craft unions organized with the American Federation of Labor (AFL). They were associated early on with the Knights of Labor, and later on the Wobblies (International Workers of the World). The IWW in particular was tied to socialism and other left wing movements in the early 20th century. One of their founding members was Eugene Debs, who ran multiple times as the Socialist Party’s candidate for President.
Based on their founding industrial principles of inclusion and organizing workers across class, race, gender, etc. many CIO unions founded during this time were more democratic, allowing rank-and-file workers to have a strong voice in the running of their union. This was the height of industrial unionism in the US, and the following decades, particularly the rise of anti-communist sentiment in the 1950s, would aid in its decline.
Several factors made labor organizations less democratic and less active after the depression. First, during WWII, popular public support for strikes decreased, as workers were expected to set aside issues to support the war effort. Employers and union leaders were expected to work together, which established a closer relationship between the leadership-level of unions and the business owners.
Second, as a result, bureaucratic mechanisms were implemented to settle disputes between employers and union officials. This led to a greater stratification between the rank-and-file workers and the leadership of the union. Workers no longer needed to go on strike, and “the mobilizing apparatus of most unions tended to enter a state of atrophy (Fantasia & Voss, 84.)” As the rank-and-file became less critical to the success of a union, leadership no longer needed their support in the same way as before. This sense of demobilization also was a result of post-war prosperity- union leadership could keep workers and business interests’ content simply because there wasn’t as much competition from overseas.
All of these factors led to increased power for union officials, and decreased control for the voices of the rank-and-file.
Finally, a critical factor that changed the way the public saw unions was the rise of anti—communist sentiment in the 1950s. In 1947 the Taft-Harley Act was passed, which severely limited the actions of unions, allowed states to enact right-to-work legislation, and required union officials to sign non-communist affidavits. These provisions served to further decrease the mobilization and radicalization of unions, which again entrenched the gap between officials and rank-and-file. Previously left-wing unions quickly took actions, such as purging leftist leaders, to disassociate themselves from anything possibly perceived as Communist.
The 1950s also saw popular figures like Jimmy Hoffa rise in notoriety, and media like Along the Waterfront, which depicted union corruption on the East Coast Waterfront, highlighting the corruption some of these now over-powerful union officials exhibited.
The association with the left during the Cold War, as well as rising public awareness of corruption due to increased inequality between union officials and rank-and-file workers harmed labor’s political perception during this time. In the following years, there was a general decline in labor’s power- particularly that of industrial unions- as manufacturing started to move overseas and international competition returned as the world rebuilt from WWII.
In 1981, Ronald Reagan broke the Professional Air Traffic Controllers Organization strike, firing any workers who continued their strike. This was a blow to labor’s political power, particularly public sector unions. PATCO signaled a new, anti-union rhetoric that would arise from the political right, and, when combined with the perception of bureaucratized and visibly corrupt unions, this tarnished their reputation in the eyes of the American public.
For further reading, I’d recommend check out
“Hard Work: Remaking the American Labor Movement” by Rick Fantasia and Kim Voss
There's more to be said, but this answer by /u/TruthKeeper about Jimmy Hoffa and the mob may be of interest regarding the second half of your question.
Hopefully these help tide you over.
User marklemagne's answer in: Why did the American mafia get so heavily involved in the trade unions?
Less directly related, user The_Truthkeeper in: Who was Jimmy Hoffa, and what’s the significance of where his body is buried?