MPI / Getty Images What happened to American labor unions?

Last week came news that the share of America’s workforce that’s unionized hit a 97-year low. A mere 11.3% of workers now belong to a union, and a great chunk of those are in the shrinking public sector. In the private sector, unionization fell to an abysmal 6.6%, down from a peak of 35% during the 1950s.

Most Americans yawned at this news. On one level that’s understandable. After all, most Americans aren’t in a union. It’s a vicious cycle: as unions decline, fewer people see their fates as bound up with unions, which just accelerates the decline.

But on another level, America’s non-reaction is striking. We remain in the wake of the Great Recession. Inequality and wealth concentration are at levels not seen since just before the Great Depression. This would seem as ripe a time in modern memory for a revival of organized labor. Instead, a basic assumption now shapes most Americans’ mindset about labor: the belief that the death of unions isn’t my problem because I’m not in a union. That assumption is wrong in two critical ways.

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First, the fact is that when unions are stronger the economy as a whole does better. Unions restore demand to an economy by raising wages for their members and putting more purchasing power to work, enabling more hiring. On the flip side, when labor is weak and capital unconstrained, corporations hoard, hiring slows, and inequality deepens. Thus we have today both record highs in corporate profits and record lows in wages.

Second, unions lift wages for non-union members too by creating a higher prevailing wage. Even if you aren’t a member your pay is influenced by the strength or weakness of organized labor. The presence of unions sets off a wage race to the top. Their absence sets off a race to the bottom.

Unfortunately, the relegation of organized labor to tiny minority status and the fact that the public sector is the last remaining stronghold for unions have led many Americans to see them as special interests seeking special privileges, often on the taxpayer’s dime. This thinking is as upside-down as our economy.

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This country has gotten to today’s level of inequality because, ironically, those who work for a living think like atomized individuals while those who hire for a living organize collectively to rig policy in their favor. Today’s 97-year low is the result of decades of efforts to squeeze unions and disperse their power.

To be sure, unions bear part of the blame for their own decline. Some of the work rules they’ve achieved through bargaining made their companies and their own unions less adaptive to change. That’s why a few national labor leaders, from Service Employees International Union and elsewhere, have launched a “Labor 3.0” project to reimagine unions. And it’s significant that innovative forms of worker organizing are now emerging, like Coworker.org or the National Domestic Workers Alliance, that bypass traditional union structures altogether.

Whatever form it takes, though, organized labor keeps an economy healthy. Some conservatives now argue for a higher federal minimum wage on the notion that when companies pay their employees enough to live, the employees will rely less on government assistance and participate more in economic life. Precisely the same case can be made for unions. Consider that workers at non-unionized Walmart constitute in many states the largest bloc of food stamp and Medicaid recipients.

If we want a better economy, then, we need a better story about how the economy works, in which a union worker is not a cost but a customer. The weakness of labor is everyone’s problem — and its revival everyone’s opportunity.

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