Paradoxes of the Crisis: The Pandemic Has Generated an Explosion of Domestic Debts in Argentina

Lucía Cavallero and Verónica GagoCovid-19

Translated by Tara Phillips

First published in Página 12 on October 4, 2020.

Unpaid debts for rents and utilities, including electricity, water, gas, and internet access, grew at an accelerated rate during the months of social distancing meant to prevent the spread of the novel coronavirus. Currently, feminized and precarized economies are the preferred objects of indebtedness.

The quarantine can be analyzed by looking at which types of movement generate debt and which generate earnings. This method not only makes evident who can stay at home and who cannot; it also shows that moving and staying put have different impacts on income and debt.

This is why it’s impossible to understand the housing crisis without considering rising tenant debt. In a similar vein, the reason for the lack of internet access in the most precarized neighborhoods wasn’t evident until it became apparent that cell phone debts had become exorbitant during the pandemic. Real estate developers, landlords, and creditors are taking advantage of the current state of immobility for many.

At this point in the crisis, what role does indebtedness play at the global and the domestic levels? In our 2019 study Una lectura feminista de la deuda (A Feminist Reading of Debt), we show how public indebtedness, which has accelerated exponentially in the past four years, translates into economic adjustment policies that spill over into homes as domestic debt.

Rampant inflation and the resulting decrease in the purchasing power of salaries and government benefits have produced a reality in which indebtedness has become compulsory for accessing basic goods like food and medicine. Here, domestic debt appears in its most political guise: as a means of metabolizing the effects of economic adjustment, which forces people to supplement already insufficient incomes in order to consume increasingly dollarized products (food, medicine, rent).

In this way, household debt also operates as a mechanism that enforces precarization by forcing workers to accept work that is increasingly poorly paid. As a result, debt becomes the internal motor that drives limitless flexibility as it organizes and dictates forms of labor. At the same time, debt is a means of exploitation that manages to intensify and adapt to the progressively heterogeneous realities of labor.

Finance, shot through with technical complexity and thought of in terms of its everyday impact, should be understood as an extractive logic of capital, organizing what we call “financial extractivism.”

Housing and Rent

An accelerated growth in poverty and widespread precarity have been clearly seen in the months of preventative and obligatory social distancing, in addition to a sharp rise of household debt as a consequence. Decreased incomes for large sectors of the population without permanent paid employment, wage cuts for those who have steady jobs, and lay-offs all form part of the current landscape, marked by accelerated impoverishment and the tendency to use debt as a form of supplemental income to make ends meet.

Based on the research we’ve undertaken in surveys and interviews, in addition to other resources that we’ve been working to systematize, we seek to specify the new forms of indebtedness that are being produced during this crisis. One of the current centers of conflict is housing.

Since the order to shelter in place, promoted by the hashtag #QuedateEnCasa,1 the difficulty that this presents in the current context has become clear, in particular with respect to the increase in domestic violence that has been reported during lockdown. Overcrowding, lack of clean water, and unpayable rents are the effects of the accelerated financialization of access to increasingly expensive and scarce housing. Another obvious effect is the recent wave of land occupations.

According to a monthly survey of tenants by the Federación de Inquilinos (Federation of Tenants), more than 60 percent of renters are in some type of debt (be it either bank or non-bank loans, or with family and friends), and have been unable to pay rent since May.

Debt for housing is an expression of what we call landlord violence (violencia propietaria), which is also characterized by abusive landlords and real estate developers who take advantage of difficult situations to threaten, intimidate, refuse to renew leases for, or directly evict tenants. Above all, this violence sets the stage for forced indebtedness and, as time passes, the financing of debt with more debt.

We know that for many, debt is a precursor to eviction and, at the same time, the means of postponing or deferring it. However, landlord violence intensifies in the informal real estate market where homes are hotel rooms, rented rooms in shantytowns (villas), or shared housing in slums (asentamientos), where there is usually no contract or receipt of payment, and the inflated costs are equal to or more than the rent for a small apartment.

In a new turn with respect to the recent land occupations, the majority of occupiers have explained their situation in terms of the impossibility of continuing to pay rent and accumulated debts for housing.

These debts, moreover, seek to seize future income in the form of wages or government benefits. Or, alternatively and more directly, they require renters to take on new debts within families or social circles. This also translates into profit for the financial institutions buying indebted properties. At the same time, it parallels the global circulation of investment funds in various countries that are currently doing profitable business with evictions and displacement.

The Feminization of Poverty

We must also analyze how domestic indebtedness intervenes in the gap between paid and unpaid labor. The urgent situation of the economic crisis, accelerated by Covid-19, has intensified the indebtedness of women, continuing a trend that we have observed during the past few years. According to data from the Dirección de Economía, Igualdad y Género del Ministerio de Economía (Office of Economy, Equality, and Gender of the Ministry of Economy), 1,900,000 women who receive the AUH (Asignación Universal por Hijo, or Universal Allowance per Child) have debts with Anses (Administración Nacional de la Seguridad Social, or National Social Security Administration).2

This trend has increased and diversified during the pandemic, as non-bank debts for rent and utilities such as electricity, water, gas, and internet access have grown at an accelerated rate. This tendency has been marked in single-parent households with women caring for children, thus converting indebtedness into another means by which gender inequality has intensified.

According to a monthly survey by the tenant’s organization Inquilinos Agrupados (Tenants’ Group), rent debt grows exponentially in single-income homes where single mothers live with children.

In working-class neighborhoods, where the impact of the health emergency and reduced incomes has been felt most strongly, debts for internet connectivity—which is to say the buying of data to sustain public school distance learning—grew considerably, absorbing a large part of the IFE (Ingreso Familiar de Emergencia, or Emergency Family Income).3

The situation is paradoxical in its drama: an increase in care work, in addition to the intensification of unremunerated labor that includes the education of children inside the home, generates more debt.

The unacknowledged work in households translates into income inequality that, at the same time, becomes the engine of indebtedness. It is this situation of compulsive and recurrent indebtedness, moreover, that produces a direct relation to the growth of illegal economies, including informal employment without benefits or protections for those already in vulnerable situations.

If some analysts speak about today’s workers as a “wage hunters and gatherers”4 who can no longer guarantee their own reproduction through a single, stable salary, we speak of the “debt hunter and gatherer” as a figure who expresses the deepening dispossession and precarization that is often called the feminization of poverty.

In this regard, it is fundamentally important to highlight the feminized character of the precarized economies that are the preferred object of indebtedness today. A feminist reading of financial hardship, like the one that we have been developing, confronts the abstract dynamics of finance in its relation to everyday life. It also deals with forms of violence in homes and in other arenas, and in terms of current modes of exploitation in remunerated and non-remunerated labor.

Who Will Pay for the Crisis?

This situation was not created overnight. It has a genealogy in our region that can be quickly synthesized. If in the 1980s indebtedness disciplined democratic transitions in Latin America as a way out of dictatorship, then in the 1990s the set of neoliberal reforms associated with the Washington Consensus imposed new debt thresholds, and the last few years have been witness to a strong resurgence of financial penetration in our countries, combined with more intensive poverty and the dispossession of resources.

The financial colonization that has spread through domestic debt took as its territory of conquest the most impoverished and precarized populations. At the same time, this is retroactively linked to the way in which social assistance benefits have been connected to mass bankarization, in a process that has been taking place for more than a decade in the region.

When debt relations trickle down, they spread the impact of debt taken on by states with a cascading effect. In other words, the dispossession and privatization by which the indebted state is obligated then translates into compulsive indebtedness for subaltern sectors, who have no choice but to access goods and services through the mediation of debt. This has the effect of modifying the relation between income and debt, as well as the relation between debt and access to rights.

Moreover, this particular cartography permits us to see the bodies, economies, and territories on which debt is produced. This is the feminist methodology that we have been elucidating, which moves from finances to bodies. Who is responsible for the taking on of debts? How? With what interest rates? And what types of work, remunerated or unremunerated, characterize the most indebted sectors of the population? These are some of the questions that we have developed in the last few years, as much in political action as in the production of knowledge and information.

An investigation of the pandemic begins to show how the proliferation of private debts in the economic crisis exploits domestic and community work and territories, and at the same time allows us to trace the political dilemmas of the current moment.

On the one hand, we have seen that a large portion of the IFE issued by the national government, along with income subsidies and salaries, is being absorbed by banks, supermarkets, telecommunication companies, tech companies, and for the payment of debts. And, on the other hand, the forms of labor precarization that we are seeing accelerate point to a series of problems that predate the current crisis.

Capital—and the business and financial sectors that drive it—will take advantage of the crisis to reconfigure forms of labor, consumption, income standards, and relations of sex and gender. More concretely, we believe it is likely that we are facing a restructuring of class relations centered on the sphere of social reproduction. This includes the home but also the reproductive labor done beyond its walls.

Clearly, in some sectors the present moment has not led to a stoppage of activities due to quarantine. Rather, it has represented an opportunity to accelerate the logic of profit, which takes advantage of the indebted immobility that is embodied within an increasingly exploited and precarious domesticity.

About the Author

Lucía Cavallero and Verónica Gago

Lucía Cavallero is a sociologist and researcher at the Universidad de Buenos Aires, and member of the feminist collective Ni Una Menos. Her research focuses on social conflict. She teaches in the gender studies masters program at the Universidad Nacional de Tres de Febrero. She is the co-author of Una lectura feminista de la deuda (A Feminist Reading of Debt), published in Argentina by the Rosa Luxemburg Foundation (2019), in Brazil by Criação Humana Editora (2019), and in Italy by Ombre Corte (forthcoming).

Verónica Gago teaches political science at the Universidad de Buenos Aires and is professor of sociology at the Instituto de Altos Estudios, Universidad Nacional de San Martín. She is also assistant researcher at the National Council of Research (CONICET). Gago is the author of Neoliberalism from Below: Popular Pragmatics and Baroque Economies (Tinta Limón 2014, Duke University Press, 2017) and of numerous articles published in journals and books throughout Latin America, Europe, and the United States. She is a member of the independent radical collective press Tinta Limón. She was part of the militant research experience Colectivo Situaciones, and she is now a member of Ni Una Menos.

  1. Translator’s note: This is the hashtag that has been used to promote shelter in place in Argentina and other Spanish-speaking countries. It is similar to #StayAtHome. []
  2. Translator’s note: The Asignación Universal por Hijo is an assistance program in Argentina that pays monthly subsidies to families for children who are disabled or under 18. At present, it applies only to families who do not have a regular reported income. []
  3. Translator’s note: The Ingreso Familiar de Emergencia is an emergency welfare program started in response to the pandemic. []
  4. Translator’s note: Quoted in Michael Denning, “Vida sin salario,” New Left Review 66 (2011): 77-94; the term comes from Jan Breman in Wage Hunters and Gatherers: Search for Work in the Urban and Rural Economy of South Gujarat (Oxford: Oxford University Press, 1994). []

Share this Post