Definition of Debt Peonage
Although no longer practiced in the United States, debt peonage has historical roots not only in the United States, but in countries throughout the world. Considered a form of slavery, debt peonage requires individuals to work off debts with little to no compensation for their labor. The United States Department of Labor notes that debt peonage, also known as "debt servitude," is illegal, as it violates an individual's civil rights.
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How It Works
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Through debt peonage, a debtor must pay off her debts through labor to her creditor. Paying off a debt you owe through physical labor is not, in itself, illegal. Should your creditor force you to perform labor in lieu of payment or intentionally entrap you into debt with the intention of locking you into involuntary servitude, however, it violates federal law.
Family Peonage
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Debt peonage does not solely constitute an individual performing physical labor to pay off his own debts. The term also refers to creditors forcing the debtor's family members to work in an effort to pay off debts they did not personally incur. An extreme example of debt servitude for entire families occurred in Nicaragua during the 17th and 18th centuries. Landowners forced the wives and children of debtors to perform manual labor until the debt was paid in full. In some situations, the debtor was not required to perform any labor himself provided he agreed to force his family members to work for the creditor.
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Escaping Debt Peonage
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Yet another feature of debt peonage is that, historically, creditors made it difficult for workers bound by servitude to pay off their debts and escape servitude. Creditors benefited more from the debtors' labor than from receiving payment. Thus, creditors would charge interest rates too high for the debtors to pay off. Some creditors increased the balance the individual supposedly owed. With no recourse, the debtor was trapped into servitude to her creditor indefinitely.
Debt and Trafficking
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One example of the entrapment associated with debt peonage occurs through human trafficking. In a debt peonage scenario, an individual offers to smuggle an individual into the U.S., provided he agreed to work off the debt upon her return. The goal for the individual is to find better paying work and better living conditions. She may discover later the debt is far higher than she anticipated, and her "benefactor" may require prostitution as the form of work she must provide in repayment. The benefactor has the freedom to force the debtor into and out of other countries against her will for the purpose of prostitution. This form of human trafficking due to debt peonage still occurs as of 2009, according to the U.S. Department of Health and Human Services.
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References
- U.S. Department of Justice: Involuntary Servitude, Forced Labor, and Sex Trafficking Statutes Enforced
- "Hispanic American Historical Review"; Labor in a Noncapitalist Transition; Elizabeth Dore; August, 2003
- U.S. Department of Health and Human Services: Human Trafficking Into and Within the United States; Heather Clawson, et al., August, 2009
