Rerum Novarum takes its name from its first two words, on new things, and the new things are industrial. Leo XIII writes in 1891 to a Europe of factory towns, long hours, child labour and the collapse of the guilds that had once regulated a trade. Two answers were in the field and he rejects both. Liberal economics held that a wage agreed between a free worker and a free employer was by definition just. Socialism held that the remedy was to abolish private ownership of the means of production.
Against socialism the encyclical defends private property as rooted in the nature of the person, arguing that a man who works the land or the machine has a claim on what he makes and on what he can put by. Against unregulated contract it makes the argument that gave the document its later force: a wage may be freely agreed and still be unjust, because the worker's consent is not free when the alternative is destitution, and because the remuneration ought to be enough to support a frugal and well behaved wage earner.
From those two positions the practical claims follow. Workers have a natural right to form associations of their own, which in the conditions of 1891 meant trade unions, and the state may not forbid them. The state has a positive duty to protect the weaker party, to limit hours, to safeguard women and children in industry, and to secure a day of rest. Charity is not a substitute for justice.