From http://aceterrier.com/?p=339, I found this. He does not give any citations and I don't know anything about him (Jonathan Bogart) so don't know how reliable the assertion of the song's origins in England may be.

"Peg And Awl," though, is more traditional: a song that in various forms dates back to the Industrial Revolution in England, when mechanized mass production first began to displace skilled craftsmen (like shoemakers) and to render obsolete their professional tools (like awls). Partly because the theme of machines replacing men had only become more relevant in the years since (as indeed it has today), the song never needed much updating or refashioning; Ned Ludd would recognize it immediately.