[WS:] Interesting argument, one that I voiced myself on various occasions. However, to be a true counterfactual, we would need to hypothesize plausible consequences of this alternative history. The issue at hand is the existence of a labor party and public social protections. We also need to consider what actually happened - the end of the civil war led to the creation of rather generous by the standards of the times public welfare provisions for Union soldiers and their families (loosely defined) which keep expanding to the beginning of the 20th century, whose purpose was mainly dispensation of patronage to the North (the source of this information is Theda Skocpol, "Social Policy in the United States" and 'Protecting Soldiers and Mothers"). These social provisions withered only in the 1910s.
It could be argued that in the case of Union defeat - which in this case means allowing the Southern secession - this patronage based dispensation of social welfare would not have taken place, which would have weakened patronage and its demobilizing effect on the working class. What is more, labor was in a much stronger position in the industrialized North than in the rural South. Therefore, it is possible - although I am not sure how likely - that the counterfactual United States of the North would have a labor party along the lines similar to other ex-British colonies.
The real question is what would have happened in the Unites States of the South. My guess is a development similar to that in South Africa - the development of an apartheid state. The stability of that state would pretty much depend on the position taken by the US of the North - but one possible outcome is that apartheid would have solidified world-wide e.e. by forming a, "apartheid axis" based on US of the South, South Africa, Rhodesia and may be a few smaller colonial states. Not a nice prospect, to say the least.
With that in mind, I am not sure that the counterfactual separatist route would have been an improvement to the actual development, and chances are it would have been something much worse for a lot of non-white people.
-- Wojtek
"An anarchist is a neoliberal without money."