At the turn of the century in late Victorian England, the social researchers Charles Booth and Benjamin Rowntree began drawing a “poverty line” for the minimum amount necessary for a family to live on in London and York, respectively.
Separately, they calculated the proportion of households subsisting below the poverty lines they had set by working out the bare minimum of necessary outgoings for a healthy life, such as rent, fuel, food, clothing and household items. National “poverty lines” are still calculated today across the world, and the World Bank measures a daily per capita “international poverty line” – the global absolute minimum needed to survive each day.
Policy experts and politicians may disagree over the best measures for poverty and inequality, but there is a public awareness of the “poverty line” or “breadline” – that eventually, poor becomes too poor.
There is, however, relatively little focus on the other side of the spectrum. The Occupy movement’s “We are the 99 per cent” slogan in the 2010s resurrected US public intellectual Gore Vidal’s label of the nation’s wealthiest as the “one per cent”. While this popularised the idea of disproportionate wealth distribution in everyday language, there still wasn’t a “poverty line” equivalent – it isn’t possible to officially define what makes a household “rich” in Britain.
For the first time in the UK, academics have conducted a study into what they’re labelling the “riches line”, in an attempt to calculate what it means to be rich, and to work out how much is too much wealth.
The study, “Living on Different Incomes in London: Can public consensus identify a ‘riches line’?”, by researchers at Loughborough and Birmingham universities and the London School of Economics, asked London residents what kinds of goods and services represent a wealthy lifestyle. It was commissioned by a poverty and inequality charity in the capital called Trust for London.
Its results show that people in London – which was chosen as a location because inequality is rife and visible to all – can easily identify what makes a household rich, but struggle to agree on where to draw the line, ie. at what point wealth and income become excessive.
Five levels of lifestyle, from A-E, were defined during conversations among six focus groups of participants (men and women of working age, on incomes ranging from below £20,000 to above £100,000). Researchers started off by describing Level A, the “Minimum Income Standard”: what the public thinks is an acceptable minimum standard of living, outlined in previous research.
The levels worked up from this all the way to the “Super Rich”. Here are how these groups were defined by the participants:
Level A – The Minimum Income Standard (introduced to participants at the beginning of focus groups as an anchor for the other levels)
- More than just food, clothes and shelter
- Social housing for households with children
- One-bedroom private rental flat for working-age singles or couples
- Low-cost monthly contract Android
- Freeview but no subscription packages
- £20 per person per week for social activities
- Meals out together as a special occasion, four times a year for families
- One self-catered UK holiday per year
- Reliance on public transport
- Shopping at Tesco
- Furniture from Argos
Level B – The (surviving) comfortably
- Some financial constraints
- Possibility of a mortgage on a modest property for a working couple, or ability to afford a higher rent within the private rental sector
- Cleaner once a month and other domestic services, such as a window cleaner
- Ability to cope with sudden financial shocks, like redundancy
- Modest savings
- Ability to eat out, perhaps on a weekly basis, at restaurants with £15-£20 main courses
- Shopping at major supermarkets, but can afford £10 bottles of wine
- Netflix or Amazon Prime subscription
- Cinema once a week
- Low-cost gym subscription
- Reliance on public transport in inner London, with use of Ubers for added convenience
Level C – The (securely) comfortable
- Home ownership
- Savings and investments
- Financial adviser
- Some luxury goods – eg. designer handbags or handcrafted artisanal items
- Formal childcare
- Full-time private nursery
- Eating out once a week
- Wider range of activities and school trips for children
- At least two holidays a year – possibly skiing
- Comprehensive home entertainment package
- Premium gadgets – iPad, MacBook
- Weekly cleaner and gardener
- Shopping at Waitrose and Marks & Spencer
- Private health insurance
- A pet
Level D – The wealthy
- Access to additional income streams – property rental, shares and dividends, offshore investments
- Private banking and a wealth manager
- Larger home with “more bedrooms than you need” owned outright OR owning more than one home
- Shopping delivered by organic or “high end” retailers
- Additional car – eg three cars for a two-adult household
- Five holidays a year
- Privately educated children
- Hobbies include sailing, collecting art/antiques and riding
- Own horse and pay for stabling
- Member of private leisure clubs
- Personal pilates instructor
- Pedigree pets
Level E – The super rich
- Many houses owned outright in several countries
- Private jets
- Supercars and yachts
- A range of staff – chauffeur, gardener, dog walker, housekeeper, chef, butler
- Multiple personal assistants
- Professional services (doctors, lawyers) on a retainer so they could be summoned when necessary
- A publicist and someone to deal with public relations
It was generally only at or above Level D that any negative aspects of being rich were expressed by participants, and the focus groups’ responses suggested that there is “no appetite for defining a threshold above which riches are problematic”.
According to the report’s conclusions, “this seems to be partly because people identify with the wealthy as their imagined (or aspirational) future selves, partly because they regard the status quo as inevitable, and partly because people are simultaneously aware of potential benefits to society as well as harms”.
“Overall, participants concluded that it was not easy to judge whether in a particular case someone did or didn’t deserve their wealth, saying that it depended on how people had acquired their fortune and how they chose to use it,” commented lead researcher Abigail Davis, of the Centre for Research in Social Policy (CRSP), at Loughborough.
“They were more critical of those who had inherited money and had not earned it, as well as those who ‘hoarded’ it or were ostentatious, but said that those who had worked hard and used it to create jobs and support charities were more deserving and could provide inspiration to others.”
Participants did, however, believe that the rich in general have a duty to improve society and use their wealth to help the worse-off.
These findings tie into the practical point of studying such attitudes. With questions of tax and redistribution raging, particularly during last year’s general election, the report suggests that such debates “should focus as much on wealth as on income, be sensitive to different sources and uses of wealth, and be framed in terms of the positive contributions the wealthy are in a position to make rather than their excessive consumption.”
Previous quantitative studies of society’s most well-off individuals generally separated income and wealth, or focused on salaries without other factors such as inherited wealth or assets.
This report’s authors argue that the financial resources of the rich “can be complex” and “the phenomenon of ‘riches’ needs to be understood as comprising both income and wealth, in the same way that poverty comprises both low income and lack of wealth”.
As election campaigns focused on fighting inequality (Ed Miliband in 2015, and Jeremy Corbyn in 2017 and 2019) in the UK fail to chime with the public, it is important to build a thorough understanding of public attitudes towards the wealthy.
We already know that the British public tend to misidentify where they sit on the wealth scale and that there is a stubborn belief (disproportionately among higher earners) in meritocratic narratives – rather than social and economic disadvantage – in this country.
Equally, when testing how best to engage the public in stories about poverty, charities like the Joseph Rowntree Foundation (JRF) are finding that the language of “equality”, “fairness” and “empathy” doesn’t cut through, according to Abigail Scott Paul, deputy director of advocacy and public engagement at the JRF: “If you think about a lot of anti-poverty campaigning, it’s ‘fairness’ or ‘equality’ – those values are not helpful if you’re trying to engage the broader public, not just your allies or people in your echo chamber.”
In addition to this, as the report’s authors point out, politicians set policy on, and disagree over, arbitrary ideas of what makes you “rich”. The £80,000 annual salary (which featured in both main parties’ tax proposals at the last general election) is simply “a random threshold”:
“While economic inequality is clearly a current phenomenon, public attitudes towards more redistributive policies are complex and there is no agreement on what it means to be rich… Current political debates about tax policy are based on arbitrary assumptions about who should or should not count as rich.”
To have any hope of closing the widening gap between rich and poor, then, research like this latest paper is sorely needed. “The lack of empirical evidence for people’s perception and normative (value-based) evaluation of riches can be a barrier to action partly because it is possible to deflect attention from any one well-off group by considering those who are better-off still,” says the report.
“Another way of thinking about high pay or a riches line is to consider what it would take for incomes to be distributed more equitably, such that it was possible for everyone to have at least a social minimum.”
Read it here.