Soledad is 43 and lives with her 16-year-old son. She’s a municipal employee, also working independently online with a personal enterprise. Combining these posts she earns a monthly income which, according to the INDEC national statistics bureau, is well above what a three-person family would need not to be poor. Yet she still has a hard time making it to the end of the month.
“I’m a single mother and the head of a household. Until last December we were three but my older son left home, leaving us two. I have a rent contract which increases annually and I felt the pressure of last year’s [rent] hike of over 200 percent in October. I still haven’t been able to adjust,” she explained to Perfil in an interview.
Since last October, rent represents half her total salary and she has problems paying her various credit cards and loans. Soledad isn’t the only one – according to a survey by Inquilinos Agrupados tenants organisation, 63.7 percent of households have debts of some kind and 91 percent have had to sacrifice various expense items to pay the rent.
Soledad’s situation fits into new research by the Catholic University of Argentina’s (UCA) Observatorio de la Deuda Social poverty watchdog. Its new study highlights those living in “economic stress” or “a perception as to the capacity of total household income to cover basic monthly consumption while sustaining consumer patterns and a capacity to save.” In other words, a household whose insufficient income is manifest.
“They do not manage to cover their basic and habitual consumption while also declaring saving to be impossible,” details the UCA report. Last year 33.4 percent of those not defined as poor were in a situation of economic stress, a figure that is on the rise: in 2022 it stood at 26.4 percent and in 2023, 27.5 percent – an increase of seven percentage points in the last two years.
“Now I’ve got a neighbour to drive me to work and I’m saving on transport. Sometimes I cannot load up my SUBE public transport card, which complicates me a whole lot. I often walk over 40 blocks to work and another 40 to get back,” said Soledad.
“In recent times everything has got more complicated for me, even food,” she continues. “Before we ate pork or chicken every day, whichever was cheaper, but now in the last week of the month we generally eat rice, spaghetti or polenta and sometimes we cannot afford cleaning products. We eat beef once or twice a month, no more than that.”
Limitations
The authors of the UCA analysis begin with a reflection: “While poverty measurements based on monetary thresholds have proved a relevant contribution for monitoring living conditions, there is sufficient evidence as to their limitations for capturing the complexity of the experience of economic deprivation.”
One of those authors is Juan Ignacio Bonfiglio, who told Perfil in an interview that the calculation of economic stress is a complementary measurement to others like poverty measured by income or multidimensional poverty. “One more element in the analysis for a general diagnosis,” he explained.
Bonfiglio detailed that this report is “different from others” because “it registers economic stress as a situation in which the household head declares that monthly income does not suffice to cover the expenses of that household, an inability to save or cover expenditures.”
“In this sense it is an objective definition but based on questions which are subjective. Although we do not refer to a situation of poverty, it is a question of hardship relative to that household,” he continued.
UCA’s investigation explains that there are certain factors contributing to an increase in the situation of “economic stress” or deprivation: monetary poverty (65.2 percent of the persons whose incomes define them as below the poverty line without being destitute, with 87.1 percent of the destitute also placing themselves in this situation), along with shortcomings in healthcare and psychological welfare.
In the first case, said Bonfiglio, “to the degree that poverty levels and economic vulnerability increase, there is greater economic stress but the interesting thing is that those in conditions of economic stress are not necessarily poor in terms of income but at the same time enter into situations of poverty which they do not experience or declare to be a question of insufficient income.”
The case of healthcare “plays a significant and relevant role in explaining the factors underlying economic stress,” readse the report. “Food insecurity and/or cutting back on spending on medical attention and medicine without health coverage – beyond the public sector – increases the risk of economic stress.” On the other hand, the report adds, “it may be supposed that psychological distress increases the probability of economic stress.”
Soledad celebrates that at least her household does not have major health problems: “Fortunately we do not take medicine nor are we in treatment. I left the shrink last December, also for economic reasons.”
Other needs like clothing or recreation have been put on hold and are not contemplated in the budget. “We don’t go to the theatre or cinema, we don’t eat out, we don’t buy clothing or footwear. Just the basics, nothing more,” she said.
Inequality on rise
Inequality in Argentina increased in the first quarter this year despite the economic rebound registered in that period, INDEC data shows. According to the official data, the income of the nation’s richest sectors is now 15 times higher than the poorest segments.
According to INDEC’s latest report on the evolution of income distribution, the Gini coefficient – an indicator to measure inequality in the distribution of wealth – was 0.435 in the first three months of the year on a scale ranging from zero to one where zero corresponds to the case of the “absolute equality of all incomes” while one goes to the other extreme with everybody having zero income while one single individual takes it all.
The figure corresponding to the period between January and March implies regression against the last quarter of 2024, when the coefficient was 0.43 – evidence that inequality was growing at the start of the year.
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