Wage Growth: Preliminary Evidence from Historical Long-Term Labor Contracts

Just kidding with that title. This post is going to be fun!

The other night in my micro class, the professor posed a question we all understand but probably haven’t thought about very much lately. Namely, what was the cost of trans-Atlantic travel in the 18th century?

We all remember from 5th grade social studies that people who wanted to go from Europe to America would pay for their journey by agreeing to become indentured servants (important words always get bolded in 5th grade). Nowadays, an unskilled immigrant, working in jobs that are probably no less pleasant than the work indentured servants did, might get paid something like $15,000 for a year’s work in America. So in the 1700s, you paid something like $45-75k for a one-way ticket across the Atlantic.

Key Terms:

indentured servant

Questions for Reflection:

1. If these agreements were voluntary, what does the prevalence of indentured servitude say about conditions in Europe in the 1700s?

2. What is the difference between salaried work and indentured servitude? Why is indentured servitude illegal?

Think Critically

1. Would anyone benefit from legalization of indentured servitude? If so, who?

Matching

1. Indentured servant                                       a. someone who, in exchange for passage
from Europe to America, agreed to work
for a particular landlord for 3-5 years