Labor Day was celebrated as an official federal holiday for the first time on this day in 1894. Always celebrated on the first Monday in September, the holiday was an initiative of the labor movement generally. It’s not clear who came up with the idea, but the first major celebration was in New York in 1881. Over the following years, it would be celebrated in more and more states; Oregon was the first, then Colorado, New York, Massachusetts, and so on. The decision to make it a federal holiday, though, came about because of a more dramatic turn of events.
The 1894 Pullman Strike in Chicago effectively shut down the midwestern American railways when over 100,000 workers walked off the job from May through July; the demonstration started in Chicago. That meant no freight or mail services across a large swath of the country.
As a conciliatory move, President Grover Cleveland declared the popular union day of recognition as an official holiday. It turned out to be part of a carrot-and-stick approach, however. In early July, Cleveland sent in the troops to break the strike. He succeeded — but only after up to 30 strikers were shot dead during an altercation. The unions buckled, and trains got moving again.