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The American Federation of Labor was founded by Samuel Gompers in 1886. Gompers, born in 1850, came as a boy with his parents to America from the Jewish slums of London; he entered the cigar-making trade and received much of his education as a "reader" (a worker who read books, newspaper stories, poetry and magazine articles to fellow employees to help break the monotony of their work in the shop) and became a leader of his local union and of the national Cigar Makers Union.

A statement by the founders of the AFL expressed their belief in the need for more effective union organization. "The various trades have been affected by the introduction of machinery, the subdivision of labor, the use of women's and children's labor and the lack of an apprentice system-so that the skilled trades were rapidly sinking to the level of pauper labor," the AFL declared. "To protect the skilled labor of America from being reduced to beggary and to sustain the standard of American workmanship and skill, the trades unions of America have been established." Thus the AFL was a federation that organized only unions of skilled workers.