Debt Peonage

Real World Example

Debt peonage was a system where workers were bound to a landowner or employer by debt, which they had to repay through labor. This practice was common in the 19th and early 20th centuries, particularly in Latin America and the southern United States, as a way to maintain cheap labor after the abolition of slavery. It allowed landowners to exploit workers, keeping them in a cycle of debt and poverty, thus addressing the demand for labor in agricultural and industrial sectors. Today, this concept still matters because similar practices persist, such as when workers are trapped in low-wage jobs due to debts or unfair working conditions. For example, a modern-day worker might take a high-interest payday loan and struggle to repay it, forcing them to work excessive hours just to cover the interest, similar to historical debt peonage.