Workers’ living quarters on a coffee plantation.

Our farmers are entering the eye-opening world of employer-employee relationships. The economics are fascinating from a social justice standpoint. After two recent federal wage increases that
have nearly doubled minimum wage in Guatemala, it is still cheaper to
hire a Guatemalan in 2010 than it was to own a slave in the US in 1865.

Capitalism works. In fact, it works better than our most recent economic alternative, slavery. Slavery had some major downsides. For example, the plantation owner had to pay for the food the slave ate, had
to put a roof over their head, give away a bed and blanket of sorts,
even provide medicine to a slave when they were sick lest they lose a
valuable commodity. With communal living of slaves, socialized
medicine, free food, subsidized rent—those plantation owners were
leftist bleeding hearts. They were lucky to turn a profit at all.

Now, good old-fashioned capitalism, with just a dash of red-blooded imperialism has proven to be a much better alternative to socialized
slavery. The free market worker is cheaper to employ than a slave. Gone
are the days of subsidizing a slave’s wage with food, medicine, and a
place to stay. A worker must make it on a slave’s wage, or not at all.

Let me give you a quick example of why slavery was more expensive than free market labor. Let’s say Mom and Dad are slaves. They work in the fields all day for food for themselves and their two little babies,
too young to work. That food today would be the equivalent of the canasta basica,
or the amount of food it takes to feed a family of 4 for a day. Today
in Guatemala, that’s Q65. Renting out even the meanest of shelters, mud
floor, tin roof, cornstalk walls, will run you at least Q17 a day. By
moving the relationship from owner to owner-employer, the boss no longer
pays for medicine, blankets, furnishings, etc. Without a vested
ownership in one particular slave, they can be let go during illness,
family trouble, what have you—and replace them with one of the many
unowned-unemployed. Call it Q5 per day in savings of medicine and the
like, straight to the bottom line. How do you calculate the cost
avoidance of not having to go to the auctioneer to buy a new slave, and
simply wait for them to come to you, for no cost at all? How do you
calculate the savings by not having lost work days when your slaves were
sick or died? I can’t put a number on it, but it was substantial. Or
how about the fact that those pesky slaves kept trying to run away,
which was a constant drain on resources. Now those slav employees are running to the boss for work. That’s a substantial improvement.

Then there is the out-of-pocket expense of buying the slave in the first place. In the 1860’s, a healthy young male in the US ran $1500, while a female was $1000. Even slave women hit that glass ceiling, but
that’s a different article. Let’s call it $1250 on average, and adjust
for inflation, and you’ve got $29611 in 2009 dollars or an even Q240,000
in 2009 quetzales. If you get 50 years of work, 7 days a week from
that slave, your cost per day was Q14 per day.

Let’s add that up

The per day cost of owning a pair of slaves is:

Initial purchase, Q14 X 2 = Q28

Food = Q65

Housing = Q17

Medicine and the like = Q 5

Total =Q115

Meanwhile, the per day cost of paying current wages for a pair of independently contracted slaves in Guatemala at legal rates is:

Daily wage, Q52.5 X2 =Q105

Total = Q105

Is it any wonder slavery died out? Of course not. It is simple economics. Give folks their freedom to work where they want, but don’t give them the opportunity or the wage, and the business magnate can make
more cash from paid labor instead of slave labor.

The slave in the cotton fields of Georgia may be a thing of the past, but the cacao worker in Guatemala, the coffee worker in Mexico, the tea worker in India, and the vanilla worker in Indonesia are still
waiting for emancipation.

Source: Asgreenasitgets.org