Re: Undead Labor: why not?
Zombies would be a no-go because of the disease factor and the fact that they are constantly deteriorating, not to mention the sensitivity complications in seeing your dead friends/family trudging around.
Skeletons would be much better if you thoroughly cleanse the bones. They have the added factor of anonymity; you can't really tell who that skeleton belonged to unless they had some recognizable structural damage in life.
The biggest consideration, IMO, would be how your campaign deals with the origins of the undead. You really don't want a large labor force of rampaging, life-hating beings in case you lost control of them.