The Department of Labor’s (DOL) website,, describes Labor Day as, “a creation of the labor movement and is [a] dedication to the social and economic achievements of American workers[i].” After reading the DOL’s website for five minutes one might liken union bosses to saints.

In reality, Labor Day’s inception was much less righteous. It was a political move by President Grover Cleveland to pacify angry unions in 1894. The rationale for Labor Day has been rewritten and labors’ iniquities ignored. Morgan Reynolds writes that unions were known for being,

   “Secret societies with secret oaths, and unionists engaged in intimidation, threats, vandalism, and violence, especially against uncooperative workers denounced as subhuman "scabs" and "blacklegs." Private property, freedom of contract, competition, and freedom of movement across occupations (slavery and indentured servitude aside) were celebrated concepts [only in name][ii].”

The Department of Labor must have forgotten all that “stuff.”
If Labor Day was not an act of appeasement, and President Cleveland genuinely wanted to acknowledge the labor movements’ “social and economic achievements,” said “achievements” should be easy to find. Unfortunately, such achievements were largely imaginary in 1894. Socially, many labor unions were actively racist and prohibited minority inclusion. Economically, labor unions inflated their wages while running non-union companies out of business and keeping non-union workers from obtaining a job. Historically, these non-union members tended to be African-Americans and Irish and Italian immigrants.
A look at unions’ exclusion, persecution, and violence towards African Americans twenty years before and after Labor Day’s official creation tells a story of union abhorrence, not social achievement. 
After the Civil War, African-Americans were allowed to occupy jobs that were previously inaccessible to them. Newly freed slaves flooded the labor market, (specifically those north of Virginia) looking for low skilled manufacturing and factory jobs. One of the first places African Americans looked for work was in the railroad industry – a flourishing sector which employed hundreds of thousands of Americans.
Native Protestants, (as they labeled themselves), and primarily Northern white males, saw the influx of African American workers as a threat to their livelihood and feared that these new “workers” would ‘steal’ their jobs by offering to work longer hours and for lower wages.
In order to maintain the status quo-white domination of the railroad industry- “natives” joined or created labor unions that constitutionally banned African Americans and even Catholics in many places.  By 1880, nearly all railroad unions proscribed African Americans. Railroad employers’ hands were tied: if they did not accept labor’s “native”-only terms, unions would strike, and their businesses would collapse. Employers had to comply with labor unions or find an entirely new labor force.
These non-union African Americans and recent immigrants would slowly incorporate into the railroad workforce by offering substantially lower wages and taking menial jobs. This direct disobedience of labor’s exclusionary wishes was not appreciated by unions. The Brotherhood of Railroad Firemen and the Brotherhood of Railway Trainmen, most notably, launched “white-only” campaigns and led violent attacks against African Americans and European immigrants to combat outside employment[iii].
The nationalization of the railroads which occurred during World War I provided a new means to prevent non-whites from working on railroads – anti-African American legislation. Railroad unions quickly appealed to the federal government. The U.S. Railroad Administration, a federal body, responded to union requests by issuing a directive instructing regional managers that African American, ‘firemen, hostlers, switchmen, brakemen, etc.’ should not be employed ‘beyond the practice heretofore existing,’ nor should they be employed on ‘any line or in any service upon any line or in any service where they have not heretofore been employed, or to take the places of white men[iv]” Only after the National Association for the Advancement of Colored People protested ruling was this directive rescinded.
This would not be the last time the federal government intervened on behalf of unions. The Railroad Administration created new regulations in 1919, one of which said: “Negroes are not to be used as conductors, flagmen, baggagemen, or yard conductors[v].” This was seen as a handout to the Trainmen’s Union.
Although most anti-African American legislation has expired, one major piece of legislation from this era, the Davis-Bacon Act, endures. The Davis-Bacon Act looked to prevent African Americans from working on federal construction projects through price controls. Under Davis-Bacon, federal construction contracts could only be given to employers who paid their workers the “prevailing wage” of that region. African American workers often charged less than the government determined “prevailing wage” making them ineligible to receive government contracts.
This was the intended effect, to require wages to be so high that it would be illegal for African Americans to obtain federal contracts. Before Davis-Bacon was passed, many legislators openly talked about their desire to prevent African Americans from competing with “white labor.” In 1931, Rep. Clayton Allgood, D-Ala said “Reference has been made to a contractor from Alabama who went to New York with bootleg labor. This is a fact. That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country[vi].”
Davis-Bacon is still law. Although Davis-Bacon’s proponents have adopted a non-racist narrative, the result is still the same: union favoritism at the expense of poor minorities. 
By effectively demonizing African Americans, unions prevented competition from a powerful minority group. It is fair to say that early unions, in fact, benefited from exclusionary laws as their wages remained inflated well over what the market would provide. The union threat to strike prevented employers from hiring cheaper African-American and European labor.
African-Americans and European immigrants were not the only minorities targeted by organized labor, nor were railroad unions the only unions to implement minority-bans. Asians were prohibited from joining the American Federation of Labor (AFL). Catholics of Irish and Italian decent faced discrimination in the northeast. Hispanics in the newly settled West were constantly harassed. Unions during this period were almost entirely comprised of Caucasian male members.
As Henry George wrote in 1891, "Those who tell you of trade-unions bent on raising wages by moral suasion alone are like people who tell you of tigers that live on oranges[vii]." I doubt Henry George thought he would be warning people about the Department of Labor.