The rich: Exactly what does the terminology mean?

 
An Occupy London Stock Exchange  activist

"Bankers", "the rich" and "the 1%" have become part of the lexicon of a maelstrom of protest. But what do the terms really mean?

A wave of protests across the world and of more measured anger expressed in newspaper letters pages and on social networking sites have thrown up a new lexicon of resentment of the wealthy and the powerful.

But how did all these newly popular terms come to be used as they are?

"The rich"

Everyone knows someone they consider to be rich. But many would struggle with a precise definition, and plenty considered rich by others would shy away from using the term.

In his book Richistan, Wall Street Journal reporter Robert Frank concluded that "people's definition of rich is subjective and is usually twice their current net worth". Some people would define rich as having more money than you "need" to live, but definition of "needs" vary dramatically.

A survey of professional households by insurance firm Hiscox suggested an annual income of £93,000 in the UK was hard to manage on. Those polled complained of feeling broke and said they would need to earn more than £150,000 before they felt wealthy.

Roman Abramovich Abramovich finds it difficult to determine who is wealthy

For some, merely owning a business means you are wealthy, regardless of whether it's a corner shop or a multinational company. During the summer riots in England, two teenage looters explained that they were showing the police and "the rich" they could do what they wanted. But their definition of rich seemed to encompass anyone who owned a shop. "It's the rich people, the people who have businesses," said one.

At the other end of the spectrum, Chelsea owner Roman Abramovich was pressed during a court appearance recently on whether one of his partners was, in his opinion, rich.

"It's hard for me to say whether someone is a wealthy person or not a wealthy person," he said.

Lurking under the surface is the knowledge that "the rich" is a hostile term in this era. During the 2008 US presidential election, Republican John McCain declared he was not a rich man, despite owning several homes.

But is there any neutral set of parameters for richness?

One way of dividing the rich from the middle class is through the top tax rate, which kicks in at £150,000 a year in the UK and $379,151 in the US.

Millionaires used to be the most obvious qualifiers for the "rich" label, but they aren't very rare these days, and the number of billionaires is rising.

The Forbes list of the world's richest people lists more than 1,200 billionaires across the globe, with Russia and China boasting more than 100 billionaires each. The US has more than 400 billionaires and Microsoft founder Bill Gates is top of the pile with a net worth of $59bn.

There are 73 billionaires in the UK - up from 53 the previous year, according to the latest Sunday Times Rich List.

Prof John Van Reenen, director of the Centre for Economic Performance, says you need to be making more than £140,000 a year to be among the top 1% of UK earners. (See the entry below on the 1%.)

No entry sign Protesters suggest the gap between have-yachts and have-nots is widening

"If you look at the top 1% of the population over the last 100 years, a century ago a big chunk of the money would have not have come from earnings - it would have come from investment returns and bequests. Today the vast majority comes from earnings."

The definition of rich has certainly changed over time.

"Powerful, mighty; noble, great." That's the first reference to rich in the Oxford English Dictionary but this definition, from Anglo Saxon times, is now obsolete.

But it also meant "having much money or abundant assets; wealthy, moneyed, affluent" and this meaning has stayed the course.

The further back you go, the rich were richer in comparative terms, says Prof Bill Rubinstein, an expert on the history of the wealthy. But there are more wealthy people now because of the rise in house prices in the UK.

In 1880 a rich person would have had £100,000 in assets or an income of £10,000 a year, he says. About a hundred people a year died leaving £100,000 and by 1910 this was 250 - "a microscopic fraction of the number of deaths at the time".

Prof Rubinstein thinks annual earnings of £250,000 is the cut-off point today and says the rich-poor divide has always been tolerable only as long as the poor have opportunities.

"The 1%"

"We are the 99%".

That's the rallying cry of the Occupy Wall Street movement which pitched its tents in Manhattan's financial district on 17 September in a move that spread to other US cities and around the world.

While it is difficult to pin down the protesters' exact goals, their terminology has been widely used in the media.

Occupy London Stock Exchange activists The concepts of the 1% and the 99% have spread around the world

The protesters claim to stand for the 99% of Americans who were not bailed out by the government.

In 2009, it took "just" $343,927 a year to join the elite group at the top of the ladder of US taxpayers. Just under 1.4 million households qualified for entry, they earned nearly 17% of the nation's income and paid roughly 37% of its income tax.

Richard Wolff, emeritus professor of economics at the University of Massachusetts, used figures from a new Congressional Budget Office report to back up the basic claim of Occupy Wall Street.

"Simply put, the CBO report shows that over the last quarter century (1979 to 2007, to be exact), the top 1% of income earners enjoyed far, far bigger real income gains than the other 99%," he wrote.

The picture is even more dramatic if you consider wealth - the total value of a household or individual's assets such as their home and investments.

According to data compiled by economist Edward Wolff in 2007, 99% hold about two-thirds of American wealth, meaning the top 1% has nearly a third.

However, the Guardian has crunched the numbers and says the divide in the US is more like the 0.01% v the 99.99%.

"Occupy" is the top word of 2011, according to the Global Language Monitor's annual global survey of the English language.

And in 10th place is "(The Other) 99", referring to the majority of those living in Western democracies who are left out of the dramatic rise in earnings associated with the top 1%.

But the Occupy protesters were not the first to use "the 1%". It has been cropping up in surveys, forecasts and reports for years.

In the UK, the richest 1% take about 14% of all income - the highest since World War II but lower than the interwar period, according to the London School of Economics' Centre for Economic Performance.

Its study looks at who they are and how their pay has changed over the past decade. A Manchester United footballer was paid an average of £941,000 last year compared to £357,000 in 2001, a top barrister's pay jumped from £286,700 to £535,417, and a partner in an accountancy firm went from £472,000 to £759,000.

The chief executive of a FTSE350 company - the index of the 350 biggest companies in the UK - was paid an average of £1.5m last year, compared with £969,000 in 2001.

Ruth Lea, economic adviser to the Arbuthnot Banking Group, says the phrase "the top 1%" should always take wealth into account.

"When it gets into the press, it's about earnings rather than wealth. It is not what I believe to be the concept of rich."

Many people would assume the top 1% are all bankers but it also includes landowners and long-standing family businesses, she says.

"In a society like ours, which is still class-ridden, there's an amazing acceptance of extremely wealthy people who have inherited the wealth. They don't come in for the criticism that the likes of Bob Diamond (chief executive of Barclays Bank) comes in for.

"It's hard for people to grab hold of the idea that his contribution to the business is that many times bigger than someone else's."

"Banker"

"Bankers" has become a catch-all "boo-word" that can be seen on thousands of placards and letters pages.

Many people imagine bankers to be pinstriped, Porsche-driving men who have big houses and high-maintenance trophy wives.

An Occupy London Stock Exchange  protester Bankers have become the enemy

Just this week, there was a story about a banker in London who spent £37,000 on dancers, Cristal champagne and food at Spearmint Rhino, a lap dancing club in London. The financier was described as a "youngish, slim Englishman" who was "celebrating a massive windfall", on his own.

According to analysis run by Collins Dictionaries, the verbs most commonly used in English with "banker" from 2009-11 are "disgrace" and "shame", says editor Ian Brookes.

Ex-Royal Bank of Scotland boss Sir Fred Goodwin will always be "disgraced", as far as some headline writers are concerned.

The most common adjective used with banker is "greedy", which is almost twice as common as the next adjective "responsible", though this is usually used in phrases like "bankers who are responsible for the mess", notes Brookes.

"Bash", as in "banker bashing", also stands out as a new connection.

Earlier this year Jamie Dimon, chief executive of JP Morgan, hit out against "banker bashing", saying it was a "huge misconception" that all banks ran into trouble during the financial crisis.

Bankers have all been tarred with the same brush, says London-based head-hunter John Purcell.

Protesters are singling out the top 1% of the banking community who tend to earn the telephone number salaries and lumping them together with everyone who works in the financial sector, suggests Purcell.

City of London workers All City workers are lumped together as "bankers"

"The protesters, whether they appreciate it or not, are really only talking about a tiny fraction of that group. They are not looking at the vast majority of people who earn reasonable reward."

Other categories of high finance worker, like hedge fund managers, have been criticised, but "hedgies" has not proliferated across placards. Of course, it was banks that were the main targets of the bailouts, but insurance company AIG was bailed out too.

"Squeezed middle"

This was a term that was ridiculed when Labour Party leader Ed Miliband first used it. Now it has earned a certain degree of status as global word, or rather two words, of the year.

Chosen by Oxford University Press lexicographers in the UK and the US, it refers to hard-working families on an average income, who are seeing their living standards eroded by rising prices, pay freezes, cuts to their pensions and increases in VAT. Like Prime Minister David Cameron's Big Society the term is widely used if not always understood.

Miliband came in for a bit of stick when he struggled to define the term during an interview on Radio 4's Today programme earlier this year but it now appears to have taken root.

Susie Dent, spokeswoman for Oxford Dictionaries and language expert on Channel 4's Countdown, says the power of the label lies in its vagueness.

It's something that a large proportion of the electorate feel they belong to, she says.

"It has actually been around for some time. Bill Clinton quite liked the idea of the squeezed middle. He talked about hard-pressed working families squeezed in the middle which sounds very familiar."

Dent believes squeezed middle is here to stay but it needs to show more longevity before making it into an Oxford dictionary.

The words squeeze and middle are now seven times more likely to occur together than any two random words, says Brookes.

He found the phrase "this squeezed middle white class" in the 1928 book Dark Princess: A Romance by William Edward Burghardt Du Bois. There is a reference to the "squeezed middle class" in the Toronto Globe and Mail in 2003 and the "squeezed middle" first appeared in 2010.

"Fat cat"

Fat cats are great fodder for newspaper cartoonists. They are are usually smoking big fat cigars and their greedy grin screams "we got the cream". A giant Fat Cat flap is also occasionally drawn.

The word was first used in the 1920s in the US to describe rich political donors, but now it tends to be shorthand for those who are seen to have it easy at the expense of others.

In 2009, US President Barack Obama criticised "fat cat" bankers who pay themselves large bonuses.

There has been a gradual increase in the use of this term since the 1960s, says Brookes. From 2009-11, "fat" is the most commonly used adjective in front of "cat" - "pet" is second, followed by "stray", "pussy" and "scaredy".

The term was once aimed near-exclusively at people in the private sector, but now it's frequently used to describe those in the public sector.

Headlines such as "Town hall fat cats should be ashamed" and "The council 'fat cat' earning £570,000" are now typical.

 

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  • rate this
    -2

    Comment number 759.

    Before we all start moaning about the rich we do have them to thank that we are in the top 5 of the world for GDP. So what if they make an extra £8 per hour, that means that £3.20 of that will be taken out in tax, for someone that makes £400 per hour, £160 per hour is tax. Really we should be thanking the rich.

  • rate this
    0

    Comment number 758.

    753.Velvets

    Very admirable comments velvets and i am glad u see the benefits system as a bonus rather than a hinderance to our society and as u rightly say u may need it yourself 1 day God forbid u do tho.

    My interests were genuine as i am interested in the actual circumstances surrounding the £375 a week benefits your neighbour receives as i know lots who are on nothing like that.

  • rate this
    0

    Comment number 757.

    Very true PrintThis, 'The planting in the minds of the young that material desires and the lifestyles of the haves are what you need to aspire to' - if only more people were aware of this awful downward spiral situation...

  • rate this
    +1

    Comment number 756.

    It's probably not a popular sentiment, but I get to see home life for around 4 nights a month working 80+ hours a week. Is there something wrong with what's described here as a high salary? Europe is a big place - English isn't the own language you can work with! Rich is very relative, but the World is an place full of aspirations. Is the UK unfair? Try Asia or the Middle East...

  • rate this
    +1

    Comment number 755.

    I'm rich, I don't earn much, I don't have any assets, I have a great job - which helps people. I have great friends, and I have the capacity to hold debates on very interesting subjects.

  • rate this
    +2

    Comment number 754.

    @745
    I paid for my house because I worked hard and realised at an early enough age that rent doesn't BUY anything. I struggled to pay a mortgage while others grinned and paid rent. Now I grin while they still pay their rent.
    All is equal, except I'll leave something for my kids. What's your reasoning?

  • rate this
    +1

    Comment number 753.

    746. 1plus2
    My neighbour is of good character, I have no reason not to trust his word. I don't assume people on benefits are scrounging, lazy etc.
    I provide for myself, in my opinion that makes me rich.
    I will never knock the benefits system, or those who rely on it - I might need it myself one day!

  • rate this
    -1

    Comment number 752.

    749.Elkapan
    2 Minutes ago
    743.

    I think more people need to break through the character assassination of the proponents of communism from the West and decide for themselves; instead of relying on uneducated populist minded people like you Frank, to decide for them. Troksky's Permanant Revolution, is the only ideal solution.



    How well is his permanent revolution doing?

  • rate this
    +3

    Comment number 751.

    748. Elysiumfire

    Could not agree more, and what keeps this pyramidal structure alive? The planting in the minds of the young that material desires and the lifestyles of the haves are what you need to aspire to. Without continuous news of celebrities and footballers and bankers bonuses etc this gravy train would be derailed.

    Who controls the media - Your top 300. Just look at Maxwells empire.

  • rate this
    -2

    Comment number 750.

    According to the article the top 1% in the USA earn 17% of the nations income but pay 37% of the income tax. So putting it another way, 99% of the country earn 83% of the income but only pay 63% of the tax.

    Seems that the USA would suffer without that top 1%, or have I got it wrong?

  • rate this
    +3

    Comment number 749.

    743.

    Was that actually Marx though, or the political dishonesty of Stalin and his corruption of Marx? I think more people need to break through the character assassination of the proponents of communism from the West and decide for themselves; instead of relying on uneducated populist minded people like you Frank, to decide for them. Troksky's Permanant Revolution, is the only ideal solution.

  • rate this
    +2

    Comment number 748.

    The 1% referred to by the OWS are not defined by the wealth they accumulate, but by the control they wield, a control of all aspects of societal life, including politics.
    Most societies are structured pyramidal, with the top apex consisting of those with ultimate power and control, such as the 'Committee of the 300'. The lower levels of the pyramid are subject to those 300 and their agendas.

  • rate this
    +4

    Comment number 747.

    One of the reasons why the rich are getting richer is that wage increases are usually awarded as a percentage. So the man earning £4.00 per hour has a two percent rise of 8p per hour, while the man on £400.00 per hour has an increase of £8.00 per hour. Year after year the gap from top pay to bottom pay will just get wider. Still asking why? Those at the top just decide their own award.

  • rate this
    +2

    Comment number 746.

    742.Velvets

    So it's based only on his word must be a given then? of course being on benefits categorises a lot of people and there is a train of thought that people on benefits are scrounging, lazy,good for nothings and are not worth spit so if ur neighbour falls into that category he mite be a bit economical with the truth regarding his own circumstances just to cheese u off who knows ?

  • rate this
    +3

    Comment number 745.

    It's the home-owners who've paid off their mortgage, inherietd their house or who are having it paid off by tenants who are rich and wealthy. Not having a mortgage or having to pay rent has a huge impact on disposable income and happiness. My younger brother (35) has paid off his house in 10 years. He is a TEACHER who bought his house in 1997 when prices were affordable. This cannot be done now.

  • rate this
    0

    Comment number 744.

    738.

    Well aren't you the pillar of morality! That's all settled then, I guess.

    I suppose you don't constitute as elderly unless you're over 75?
    6 years of glorious pseudo-left propaganda before you die.

  • rate this
    0

    Comment number 743.

    717.Elkapan
    33 Minutes ago
    713.

    It's when people like you Frank; who, desperate to protect their own class privileges, attack Marx on such childish and baseless reasons- You're puerile comments do nothing but embarrass you, read Marx people, there's a reason he fears it.



    Given the poverty and cruelty of CCCP, we are right to fear you're Marx..

  • rate this
    -4

    Comment number 742.

    733. 1plus2

    Figures on neighbours benefits come from him, I trust he is telling the truth.
    I have no tips on the benefits system as it is not a system I am involved in apart from contributing to it.
    I would like to think living in a country with such a safety net makes us all rich to a certain degree!

  • rate this
    +4

    Comment number 741.

    If you've got your family, good friends and you're comfortable then you're doing pretty well. I feel for those in these times who work and don't earn much or want to work. I'm lucky to be earning a bit more than I used to but I remember how it was when I was truely poor.

  • rate this
    0

    Comment number 740.

    732.

    paraphrased gordon gekko... love it.

 

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