What purpose does it serve to put labels on people?

We all do it. Of course there are many practical reasons to do it but, putting aside the obvious practical reasons, what are the advantages, what are the pitfalls, and how can we make use of one whilst avoiding the other?

Do you think labeling people as far as race, religion, personaliity traits, philosophies, politics, ad infinitum is more beneficial or harmful?

Please elaborate to your heart’s content! I love long answers.