Experts say former Gov. Mitch Daniels' decision in 2005 to end collective bargaining for state workers contributed to the drop but that the effects of Indiana's new right-to-work law, which bars companies from requiring union membership, haven't been fully felt yet.
Bill Treash, president of the Wabash Valley Central Labor Council, said the biggest drop in union membership has been felt in the public sector. Membership fell after Daniels eliminated collective bargaining for state workers, and now postal employees are struggling to keep their jobs, he said.
"We're just trying to survive until we get some different leadership" in Indianapolis, Treash said.
Though membership has dropped statewide, some areas are holding their own.
The International Brotherhood of Electrical Workers Local 725, which is based in Terre Haute but covers several surrounding counties, has kept membership steady, thanks largely to construction of the Edwardsport Power Station in Knox County, said local president Paul Rupska.
The local has 657 members, and about 35 new members are nearly ready to graduate from the union's apprenticeship program, Rupska said.
"Edwardsport was a really good thing for our area," he said.
He said the union has lost some members, primarily to retirement.
Robert Bruno, a professor of labor and employment relations at the University of Illinois, said it could be a while before the true effects of Indiana's right-to-work law are felt. The law only affects new labor contracts, so many contracts that existed before the law was passed are still in effect, he said.
But he says it's too soon to forecast the death of organized labor and predicts union membership could grow if the nation's economy continues to struggle.
"Typically, when that happens, you create conditions where people are willing to look for collective solutions," he said.
Nationally, 11.3 percent of workers were union members in 2012, down from 20 percent in 1983.