Michigan has dealt a tremendous blow to unions, approving a right-to-work measure in the heart of organized labor's industrial stronghold.

The new law -- passed by legislators and signed hours later on Tuesday -- not only signals a change in America's so-called Rust Belt, but is also the latest sign that the power of organized labor is shrinking in the United States.

American unions already have a fraction of the influence they did a few decades ago. Only about 12% of workers are union members, down from 20% in 1983, according to federal data. In the private sector, the plunge has been even steeper: union membership has dropped from 17% in 1983 to 7% today.

That's partly because certain unionized industries have become a smaller part of the overall work force, particularly in manufacturing. It's also a result of government action.

Michigan has become the 24th state to adopt a right-to-work law, which removes the requirement for people to pay unions to work at unionized agencies, effectively decreasing union funding and making it less likely that workers choose to organize.

Union supporters in Michigan didn't go down without a fight. They staged a rally outside the state capitol in Lansing as lawmakers voted.

"People need to wake up and fight," teacher Sarah Zigler said at Tuesday's rally. "People need to realize what unions have done for them. Who gave people the 40-hour work week? Who fought for workplace safety? Who brought you the weekend? Who brought you workers comp? Who gave people overtime pay?"

"Unions!" protesters shouted after each of her questions.

For much of American history, unions have been credited with helping millions achieve the American dream and criticized for "heavy-handed" operations (They were also reviled for corruption in the days of Jimmy Hoffa.).

But unions have long remained a force to be reckoned with. Today, Michigan becomes the latest state in the Rust Belt, the heart of America's manufacturing industry, to chip away at their power.

Earlier this year, Wisconsin had its own showdown over the power of unions when Gov. Scott Walker -- who opposes unions -- overcame an attempt to recall him from office. The failed recall vote was fueled by anger over laws he pushed that stripped collective bargaining rights from most public unions. Indiana also passed a right-to-work law this year.

While there have been moments of good news for organized labor, including pay bumps for GM autoworkers, industry analysts agree that organized labor no longer holds the sway it once did among America's workers.

So why the downfall of American unions? That depends on who you ask.

Blaming big business

Big businesses are behind campaigns to squelch organized labor, and they are seeing some success, according to Gordon Lafer, a political science professor and opponent of right-to-work laws.

"The anti-union campaigns of the last three years, starting with Wisconsin, have really been driven ... by big national organizations and money," said Lafer, a union member and who teaches labor studies at the University of Oregon.

"I think an important question to think about is: Why are big private companies spending a lot of money and energy fighting public sector unions?

"They want more free trade, lower minimum wage, the right not to pay sick leave, and all those things which are not per se about union contracts. But the biggest single opponent they have is the labor movement, even in its shrunken and weaker state."

Lafer blames businesses and key business figures for lobbying to push such laws "not because of what unions are doing now for their own members but to get them out of the way on issues that will affect everybody else."

These campaigns stigmatize unions and encourage people who are unemployed to resent unions rather than big business leaders, he argued.

"Their fear is populism," he said, referring to those who are "at the top of the economy, during downward mobility."

"They want the discontent to not be aimed at people running the economy."

There's also an element of fear among those who have jobs, he said. In this time of economic uncertainty, workers are afraid to organize because they don't want to upset their employers and lose their jobs.

It's the economy

For businesses to recover from the recession and build jobs in America, they need to get out from under organized labor, according to some analysts. And that has led to the decline of union power -- which is good news, they say.