There is a degree of hyperbole one comes to expect from American activists around election time. Given the level of polarisation, this is hardly surprising. Every vote, you're told, is about liberty, justice, the American dream, the constitution or the world one wants to leave your children or grandchildren. Then, often, half the eligible voters stay at home and, regardless of who wins, not an awful lot changes.

So when activists on both sides of the effort to recall Wisconsin's governor insist "everything" is at stake, they should not be taken too literally. Nonetheless, this time they have a point.

The recall campaign was sparked last year when Republican governor Scott Walker pledged to remove collective bargaining rights from public sector unions and cut local government workers' health benefits and pension entitlements, claiming this was necessary to balance the state's budget. Walker, a Tea Party supporter, was elected in 2010 against Democrat Tom Barrett, with 52% of the vote. By February 2011, tens of thousands of protesters descended on the state capitol in Madison. In all 50 states, rallies were held to support Wisconsin unions. Before tents ever went up on Wall Street, this midwestern state was occupied. Unable to prevent passage of his anti-union bill and other measures, labour activists and progressives collected more than 900,000 signatures to recall him.

That makes Tuesday's vote a rare chance for a clear referendum on who should pay for this economic crisis – those who created it or those who have suffered most because of it. So in a state with a larger population than Ireland's and a GDP greater than Portugal's, people here will vote on the causes and consequences of austerity.

Walker's record speaks for itself. In his first year in office Wisconsin lost more jobs than any other state, and was one from last in private sector job growth. He has cut tax relief to low-income families and the state's Medicaid program. He has introduced a voter ID bill that will limit minority and low-income electoral participation, reproductive rights legislation that has forced Planned Parenthood to suspend providing basic services to women and repealed the law that protects equal pay for women.

Meanwhile, according to the Wall Street Journal, union membership has slumped since he banned automatic deduction of union dues from salaries. The WSJ reported that membership of the state's second largest public sector union, the American Federation of State, County and Municipal Employees, fell by more than half in Walker's first year while the American Federation of Teachers lost more than a third of its members.

Unemployment has fallen, although that is most likely because people have left the job market and, depending on your accountant, he has balanced the budget. He has cut property taxes for the first time in 12 years and given millions in tax breaks to corporations.

In short, he has hammered working people, undermined the capacity of those who represent them and marginalised many of those who might vote for their interests while effecting a massive redistribution of wealth from the poor to the rich: a more balanced budget for a more unequal society.

The degree to which he is successful in this project has national implications and resonates with struggles that are taking place globally. Neither the unions nor the poor are responsible for this crisis but across the world they have been scapegoated for it.

In the US, unemployment has rarely been this bad for this long, wages have rarely been this stagnant and corporate profits, as a proportion of GDP, have never been this high. In that context the referendum raises the question: should the burden for the recession, precipitated by a banking crisis, fall on labour or capital?

Conservatives seem to understand this. In a large Tea Party rally of several thousand in Racine on Saturday, speakers railed against "union thugs" "union bullies" and "pinko commies". Walker has been caught on video telling a donor, shortly before he announced the cuts, that he intended to use a strategy of "divide and conquer" to defeat the public sector unions by driving a wedge between them and private sector workers. They also see the broader implications in an election year where the economy will take centre stage. Political and financial support has flooded in from around the country. "We are going to chart the course for the rest of the country," said the state's lieutenant governor, Rebecca Kleefisch, who is also being recalled.

The activists on the ground calling for Walker's recall understand this also. Ask them what's at stake and most will say women's rights, union rights and voters' rights. But the Democratic leadership, both locally and nationally, who have taken over the recall effort, clearly don't. They have run a campaign calling for more consensual governance and less divisive rhetoric and accusing Walker of being corrupt. Bill Clinton, who came to town to stump for Barrett on Friday, called for "creative co-operation", bringing unions and business around the table to discuss common interests. There are times that can work. But not when unions are not allowed through the door, let alone at the table.

Nationally, Democrats have kept their distance. Clinton is the only high-profile Democrat to lend his support to a campaign that is being outspent by more than seven to one. Little wonder that most polls show Walker with a small but persistent lead that only a huge Democratic turnout can override. Indeed it's amazing his opponents are doing as well as they are.

So while conservatives are using Wisconsin as a laboratory to openly wage class war, the Democratic leadership keeps extending their hand and singing Kumbaya. The problem is not simply that Walker is divisive – though that is a problem – but that he's on the wrong side of the divide. Calls for unity are meaningless without first spelling out on what basis people should unite and working out where the disunity came from in the first place.

"You get out of a ditch when people stand on each others' shoulders and the person at the top starts pulling people out," said Clinton. True. But the last people you'd rely on are those who dug the ditch and shoved you in – particularly when they're still building and still shoving.

twitter/ @garyyounge