In 1882, Peter J. McGuire, a leader of the labor union the Brotherhood of Carpenters and Joiners (joiner being "a craftsman who constructs things by joining pieces of wood" or "a worker in wood who does more ornamental work than a carpenter") proposed a day to honor laborers. Laborers were considered a new class that worked in the factories and plants created by the Industrial Revolution. Labor Day became a national holiday on which workers in the 1890s and early 20th century used to call attention to their grievances. There were often parades, political speeches, fireworks, and a picnic.
Today, Labor Day, celebrated on the first Monday in September (as of 1894, by law), simply honors anyone who works. The date has no traditional or historic significance but was picked because it filled a gap in the schedule of legal holidays. Canada also celebrates Labor Day on the first Monday in September; many other countries observe this on May 1.
The word labor comes from Latin laborem, "distress, toil trouble; drudgery, labor," and first referred to work that was compulsory or painful. The meaning changed with the advent of the Industrial Revolution. The first labor unions or trade unions came with the Industrial Revolution in Great Britain in the 18th century.
- from Dictionary.com