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
    0

    Comment number 799.

    Whole story is a bit rich. So who is 'rich'? The only answer, albeit a profound one, is the way in which 'rich' is measured. Unfortunately, 'rich' is measured in the wrong unit- money. The real 'rich' person is one with the longest life expectancy with matching health, not how much money or 'stuff' they have. After all the only 'rich' people at the cemetery are those on top of the ground.

  • rate this
    +1

    Comment number 798.

    @ 778 disraeli_cogs

    714. jwright
    "If you TAX people at 90% for everything they earn over £1million our economy would crumble... "

    Except the top marginal rate of tax in Western countries was around 90% once upon a time. And none of those things happened!

    ------
    Indeed. And over 90% in the US from 1952-63, through the height of the "American Dream"

    http://tinyurl.com/datjnn

  • rate this
    0

    Comment number 797.

    40 Watt

    The reason i ask is until thatchers flawed ideas of buying ur own property was a good idea for everyone, i would have thought the majority of the UK was not naturally inclined to buy there own property as the majority of people were renting there houses and this was the natural way of things? but i am maybe assuming to much here and u did'nt fit into the naturally renting ur home.

  • rate this
    -1

    Comment number 796.

    Along with the thieving, immoral Bankers - I also class those Students who took 'Media-Studies' and who now preach to us about how wrong we are to complain about excessive immigration, Political-correctness etc - from within our PUBLICLY-funded Media - funded by US!

    Feathering one's own nest - I see...

  • rate this
    +1

    Comment number 795.

    "Everyone knows someone they consider to be rich." Really?

  • rate this
    +1

    Comment number 794.

    785. zzgrark
    1 MINUTE AGO
    778.disraeli_cogs
    "Except the top marginal rate of tax in Western countries was around 90% once upon a time. And none of those things [emigration etc] happened!"

    Yes they did. You clearly don't remember the 60s/70s."

    ---

    He clearly doesn't remember the fact that when the rates were put down to 40%, the net tax take went up!

  • rate this
    0

    Comment number 793.

    783
    Thank you 1plus2, they tried hard. Wasn't easy but you need to accept what is offered at the time and then buy from there. It's no use walking in and asking for a sky high mortgage because you've seen the house you'd like! Would some on here begrudge their progress and accuse them of being rich - they're most definitely not. All things are relative in life.

  • rate this
    0

    Comment number 792.

    782.Frank Lund
    Well @ least u dont think it's the benefits system that is why the country is in the mess it is since u dont have the figures to substantiate anything pity others did'nt see it that way at times.
    780.40Watt
    "You don't see an obsession. Neither did I - just thought it natural"

    So u seen it as a natural progression to buy your house, y was that ?
    if i may ask.

  • rate this
    -1

    Comment number 791.

    Obviously it is not very clever to paint everybody in finance sector with the same brush and I am sure that not all bankers are bad people. However many of them - well educated economists - made serious mistakes for which we all have to pay. I suggest that we should introduce a rating system for people who work with money, based on performance. And then we will know who do deal with next time.

  • rate this
    +2

    Comment number 790.

    People like me are the truly rich. Married to the best woman in the world for 53 years. I look at her and see a Billion dollars. Where the heck they went I'll never know.

  • rate this
    0

    Comment number 789.

    You never get rich by speeding money.

    Remember this phrase then remember all the economists going on about the Trickle Down Effect, or that we need the wealthy as they create jobs - well have bother look.

    In real terms the wealthy do Nothing for employment as most of their money is locked up in investment that provides very little hard cash for investments in jobs.

    The wealth gap continues...

  • rate this
    0

    Comment number 788.

    I've been reading about historical poor laws dating back to 1485. Things are better than they used to be-- when a poor person could be put in the stocks for 3 days and nights with only bread and water and then "run out of town; or being whipped or killed for begging; abandoning your infant son or daughter on the streets because you couldn't care for them. But aristocrats still get all the breaks.

  • rate this
    +4

    Comment number 787.

    The rich own the means of production and run your life.

  • rate this
    -1

    Comment number 786.

    775. TerrD

    A moronic argument thanking the rich for paying high taxes. 1) This, by no way, benefits the poor 2) They do not actually pay high taxes, bacause they are smart enough to find loopholes.

    --

    1) Yet apparently benefitting the poor is the argument people use when talking about stopping tax avoidance?
    2) Yes they do. 1% pay 26% of tax, and 10% pay more than half.

  • rate this
    0

    Comment number 785.

    778.disraeli_cogs
    "Except the top marginal rate of tax in Western countries was around 90% once upon a time. And none of those things [emigration etc] happened!"

    Yes they did. You clearly don't remember the 60s/70s.

  • rate this
    0

    Comment number 784.

    Here's another one, more comical than anything, "If the strippers harass *you* when the club closes at night then you're rich". But on a slightly more serious note, "If you never need to use the word 'budget' in relation to personal finances then you're rich". Good?

  • rate this
    0

    Comment number 783.

    773.40Watt

    Ur daughter and husband are very lucky to get on the property ladder by therselves without any help or getting into debt to have a deposit for a mortgage @24.
    Not being privy nowadays to mortgages i cannot really say how hard it is to get on the ladder but i can only say what i see and everywhere seems to be the same its incredibly hard to get on the ladder so hats off to ur Girl.

  • rate this
    0

    Comment number 782.

    779.1plus2

    Are u 1 of the people that believe that the figures that are getting bandied about of up to £500 a week or more are mostly for people that are not deserving of the Safety Net as u call it ?



    I don't have the figures on how much benefit goes to the deserving and how much is wasted.

  • rate this
    +4

    Comment number 781.

    The common use in English of the term "earn" becomes a misnomer when applied to extreme levels of income.

    Does someone who makes 100 times an average salary actually "earn" it 100 times more? Or work 100 times harder, as "hard work" is the usual refrain to justify extreme levels of income?

    Maybe they're just 100 times cleverer?

    I would feel very rich indeed on just twice what I make now.

  • rate this
    0

    Comment number 780.

    766
    You don't see an obsession. Neither did I - just thought it natural progression. Do you really want your kids to think you made sacrifices - I don't!
    770
    You assume it stays in the family. How do you know that? My daughters already have homes - they'd sell mine! Derr!
    772
    Think again buddy! You're wrong. You assume too!

 

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