What does "peon" mean here? An unskilled worker?

Yes, it’s like someone with no authority, responsibility, a menial worker.

Basically, like the English peon, батрак is used in derogatory or self-effacing context instead of historic one. For example:
– На субботник идёшь?
– Ага, ещё чего! Нашли батрака. Вон дворникам платят за это, пусть они и убирают.
But the point is that it reads a little weird here. There are more modern options for it such as чернорабочий/разнорабочий that are not very common in colloquial speech anyway.
So I'd go with работяги or шабашники. The latter differs from работяги as it means workers doing odd jobs and has a negative connotation because the quality of their work assumingly leaves much to be desired.

Got it. I think this guy was more confused about everything else in the sentence than about peon, but I changed it. Thank you.

You're welcome! To kick the crap out of something is a great expression to know. ;)