When and where did the tradition of Labor Day begin?
According to the folks at www.curious.com:
Happy Labor Day! While most Americans consider Labor Day a homegrown holiday, it actually originated after an American machinist witnessed a national Labour Festival celebration in Toronto, Canada in 1882. It wasn't until 1894 that it became a U.S. holiday. On the heels of the deadly Pullman Strike where federal troops killed over thirty strikers, President Grover Cleveland quickly pushed a Labor Day bill through Congress to try and mend fences with the labor unions. The public didn't buy it, however, as Cleveland failed to even win his own party's nomination, losing the Democratic primary to William Jennings Bryan, largely on populist themes.
2. After the US killed a bunch of workers in the late 1800s
From the wiki link above
Following the deaths of a number of workers at the hands of the U.S. military and U.S. Marshals during the Pullman Strike, the United States Congress unanimously voted to approve rush legislation that made Labor Day a national holiday; President Grover Cleveland signed it into law a mere six days after the end of the strike. The September date originally chosen by the CLU of New York and observed by many of the nation's trade unions for the past several years was selected rather than the more widespread International Workers' Day because Cleveland was concerned that observance of the latter would be associated with the nascent Communist, Syndicalist and Anarchist movements that, though distinct from one another, had rallied to commemorate the Haymarket Affair in International Workers' Day. All U.S. states, the District of Columbia, and the territories have made it a statutory holiday.