When it comes to the reasons for Monday's Labor Day holiday, the U.S. Department of Labor offers a good historical review.
The first Labor Day celebration was in New York City in 1882 and was organized by the Central Labor Union. Right off the bat, the holiday was associated with the first Monday in September. Other cities began to pass ordinances declaring a Labor Day holiday, and then state legislatures began adopting the holiday. By 1894, 31 states were setting aside the first Monday in September for Labor Day. That year, Congress made Labor Day a holiday in the District of Columbia and U.S. territories.
In 1909, the AFL designated the Sunday before Labor Day as Labor Sunday, dedicated to the spiritual and educational aspects of the labor movement.
The labor movement in the late 19th century and first half of the 20th century was an important force in the adoption of labor laws that established a five-day, 40-hour workweek and an eight-hour workday. Overtime laws, restrictions on child labor and other laws to protect the American worker were the result of strong labor lobbying.
As the Department of Labor website puts it:
"The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pay tribute on Labor Day to the creator of so much of the nation's strength, freedom and leadership: the American worker."