Organized labor does not have much to celebrate on this Labor Day. The union membership rate (the percent of workers who were members of a union), dropped again in 2011, if only slightly, to 11.8 percent from 11.9 percent in 2010, according to the Department of Labor.

In 1983, when then the department began collecting such data, the union membership rate was 20.1 percent, with 17.7 million union workers. Today there are 14.8 million union workers.

There are many explanations for the decline in the ranks of organized labor. The loss of manufacturing jobs, particularly in the more union friendly Midwest and Northeast states, has led to fewer union workers. Manufacturers in southern states have seen it as a competitive advantage to discourage unionization and have been aided by state laws that are not union friendly. In 2011, among full-time wage and salary workers, union members had median weekly earnings of $938, while those who were not union members had median weekly earnings of $729.

Texas, which saw 2.15 percent job growth from July 2011 to July 2012, had only one-fourth as many union members as New York (job growth 1.3 percent) despite having 2.3 million more wage and salary employees.

Once largely the province of the private sector, there has been a dramatic change in where union members are now found. In 2011, 7.6 million employees in the public sector belonged to a union, compared to 7.2 million in the private sector. More tellingly, 37 percent of public-sector workers belong to unions, compared to 6.9 percent of private-sector employees.

All indications are the downward trend in union participation will continue, if for no other reason than demographics. The union membership is highest among those approaching retirement age, with 15.7 percent of people 55 to 64 in unions, while membership is lowest among those ages 16 to 24, just 4.4 percent.

Despite what should be a pivotal election for organized labor, they are being outgunned and outspent in 2012. In 2008 labor union spending on political campaigns accounted for 35 percent of all outside spending, an election year during which interest groups spent a total of $87 million. In this election cycle, unions account for 14 percent of outside spending, which has already reached $174 million, according the nonpartisan Center for Responsive Politics.

The shrinking political advantage of traditionally Democratic labor unions is in contrast to the rise of the pro-Republican billionaire businessmen and corporations, outspending labor by about a factor of three.

Republican Mitt Romney has made it clear he thinks unions are not good for business, contending they reduce investment and slow job growth. Organized labor knows it will not have a friend in the White House if Mr. Romney wins.

"Too often, unions drive up costs and introduce rigidities that harm competitiveness and frustrate innovation," said Mr. Romney.

Unlike businesses and, to a lesser extent state and local governments, unions have failed to reposition themselves for the 21st century. The adversary model is not working and survival cannot depend on winning every election. Unions need a new game plan.

They should work towards defining a new agenda for the rights of working people and then promote that platform like any other special interest group, in the process becoming relevant again to sections of the workforce that now consider unions irrelevant, and in so doing find a path to sustain the labor movement.

In the latter 19th century and throughout much of the 20th century unions played a critical role in earning protections and benefits for American workers. If they are to continue playing an important role in a new century of innovation, they too must innovate.