According to Bureau of Labor Statistics (BLS) provisional estimates, in July 2003 the seasonally adjusted civilian labor force in Massachusetts numbered 3,450,000, with approximately 187,300 workers unemployed, yielding an unemployment rate of 5.4%, compared to the national average of 6.2% for the same period. Since the beginning of the BLS data series in 1978, the highest unemployment rate recorded was 9.6% in July 1991. The historical low was 2.5% in August 2000. In 2001, an estimated 4.9% of the labor force was employed in construction; 12.5% in manufacturing; 4.5% in transportation, communications, and public utilities; 17.8% in trade; 6.9% in finance, insurance, and real estate; 32.4% in services; 12.7% in government; and 1.0% in agriculture.

Some of the earliest unionization efforts took place in Massachusetts in the early 1880s, particularly in the shipbuilding and construction trades. However, the most important trade unions to evolve were those in the state's textile and shoe industries. The workers had numerous grievances: shoebinders' salaries of $1.60–$2.40 a week during the 1840s, workdays of 14 to 17 hours, wages paid in scrip that could be cashed only at company stores (which charged exorbitantly high prices), and children working at dangerous machinery. In 1867, a seven-week-long shoemakers' strike at Lynn, the center of the shoe business, was at that time the longest strike in US history.

After the turn of the century, the state suffered a severe decline in manufacturing, and employers sought to cut wages to make up for lost profits. This resulted in a number of strikes by both the United Textile Workers and the Boot and Shoe Workers Union. The largest strike of the era was at Lawrence in 1912, when textile workers (led by a radical labor group, the Industrial Workers of the World) closed the mills, and the mayor called in troops in an attempt to reopen them. Although the textile and shoe businesses are no longer major employers in the state, the United Shoe Workers of America, the Brotherhood of Shoe and Allied Craftsmen, the United Textile Workers, and the Leather Workers International Union of America have their headquarters in Massachusetts.

Massachusetts was one of the first states to enact child labor laws. In 1842, it established the 10-hour day for children under 12; in 1867, it forbade employment for children under 10. The nation's first Uniform Child Labor Law, establishing an 8-hour day for children ages 14 to 16, was enacted by Massachusetts in 1913. Massachusetts was also the first state to enact minimum wage guidelines (1912).

The US Department of Labor reported that in 2002, 428,000 of Massachusetts's 3,003,000 employed wage and salary workers were members of unions. This represented 14.2% of those so employed, down from 14.7% in 2001 and from 15.9% in 1998. The national average is 13.2%. In all, 469,000 workers (15.6%) were represented by unions. In addition to union members, this category includes workers who report no union affiliation but whose jobs are covered by a union contract.