The nation's first Labor Day came after terrible strife between workers and employers.

After federal troops sent to Chicago by President Grover Cleveland broke the famous Pullman strike, an Illinois congressman introduced a Labor Day holiday bill in 1894. It passed both houses unanimously, and the president signed it.

Nationwide, 125,000 railroad workers had joined the Pullman boycott. According to former city historian Jim Henley, Sacramento saw more strike-related violence than any community outside Chicago. Troops camped on the state Capitol grounds and the city was under martial law for two weeks.

Today, we take for granted such things as an eight-hour work day, a minimum wage, workplace safety standards, unemployment insurance, health and retirement benefits and more. Then, workers routinely worked 10 hours a day or 60 hours a week. A six- or seven-day week of 15-hour shifts was not unusual.

Changes were hard-won by an organized labor movement that realized isolated individuals had unequal bargaining power with employers.

We all acknowledge that past, but what about the present? What is the role of organized labor in today's economy and polity?

The peak in union membership came in the mid-1950s, when nearly 40 percent of American workers were either union members or nonunion members represented by union contracts.

In 1945, Eric Johnston, president of the U.S. Chamber of Commerce said: "Labor unions are woven into our economic pattern of American life, and collective bargaining is a part of the democratic process. I say recognize this fact not only with our lips but with our hearts."

That fabric has been deteriorating, however, since the late 1970s. Today only 12 percent of workers are represented by unions. In California, it is 18 percent, but most work for the government.

Timothy Noah, in "The Great Divergence," has noted the effect of this decline: "Draw one line on a graph charting the decline in union membership, then superimpose a second line charting the decline in middle-class income share and you will find that the two lines are nearly identical." The middle class has shrunk significantly, from 61 percent of the adult population in 1971 to 51 percent in 2011, according to data from the U.S. Census Bureau and the Federal Reserve.

Unions today, particularly public-sector unions, need to go back to first principles. They need to say, and not just to their own members, what they stand for and what their role is in improving conditions for all workers.

In the current climate, they cannot be content to service their existing membership – getting them more money and benefits and policing collective bargaining agreements. They need to do some soul-searching.

Start by reining in excesses. End the hysteria about raising the retirement age to reflect actual working years and life expectancy – or asking workers to contribute to their retirement. That is not anti-worker.

And just stop proposals like the one introduced this legislative session that said if a firefighter, police officer or prison guard died of heart disease or cancer at age 90 – 40 years after he had retired – a widow or other surviving relative could claim a "work-related" death benefit worth a quarter of a million dollars at minimum. Such plays alienate the public from unions.

Address the generational gap. With membership concentrated in the 40-and-older group, what do unions have to say to the workforce of the future – the 20- to 25-year-olds who are experiencing high unemployment rates in the current economy?

Embrace trade. Instead of denouncing foreign workers for "stealing" American jobs, stand by the principle that either we raise standards together or face a race to the bottom. U.S.-led trade and economic growth will help improve labor and environmental conditions in the global economy.

We are past the riots and violence of late-19th and early-20th century, but also far from the post-World War II era of shared prosperity. American society and the labor movement are at a crossroads in defining a new path for a strong middle class.

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