A brighter economic outlook
After the removal of wartime government price controls, costs shot up to match higher wages. The annual inflation rate went from 2 percent in 1945 to 9 percent in 1946 and 14 percent in 1947 before it started to level off. Higher costs meant wages bought less, and that led to strikes: More work stoppages occurred in 1946 than during all of World War II.
The Taft-Hartley Act
Although the country still had a Democratic president, it had elected the first Republican-controlled Congress since Herbert Hoover. Those Republicans managed to pass a bill over President Truman's veto that they said would get strikes under control.
The Taft-Hartley Act (1947) prohibited unions from putting pressure on their employers by picketing other companies that did business with their own company. The act also forbade unions from requiring that an employer hire only union members (called a closed shop) but it did allow union shops, in which everybody had to join the union after they were hired.
The Taft-Hartley Act is still in effect. It allows states to forbid union shops: Several states have established right to work laws that prohibit all workers from having to join a union. Additionally, unions have to give 60 days' notice when they're threatening to strike, and the president can put a hold on strikes that he feels will cause a national emergency.
A shift from blue collar to white collar workers
At the high point of union membership in the early 1950s, a third of the population was involved in some sort of union; by the early 21st century, that number had declined to less than 15 percent. The Taft-Hartley Act itself didn't cause unions to lose membership — what changed was the kind of work Americans were doing.
In the 1950s, America experienced a decrease in the number of blue-collar manual laborers and an increase in the number of white-collar service workers. For the first time in the history of the world, the white-collar desk workers outnumbered laborers who worked with their hands in the United States. This abundance of service workers has increased over the years, and the number of union members has decreased accordingly.
One obstacle for unions is the fact that service workers stay in jobs for a shorter period of time than they used to; the average American now spends less than four years at one job. This rapid turnover makes union organizing difficult.
In addition, unions were victims of their own success. Employment practices and wages have improved so much that many workers don't think they need the kind of protection unions can bring.
The Employment Act
After the war, the Truman administration sold unneeded defense plants and equipment at bargain prices to help employers grow civilian businesses. Congress passed the Employment Act (1946), which set a goal of maintaining full employment and required the president to submit an annual economic report along with the federal budget. The act established the Council of Economic Advisers, which was responsible for supplying the intelligence to keep the economy and the job market rolling.