Towards a Riches Line: Do people agree on what it means to be 'rich'?

The growing share of national income and wealth taken by a small proportion of the population has stimulated political and social discussion about whether very high incomes are ethical or acceptable, or need to be curbed, for example through redistributive taxation. High income can be considered problematic for various reasons.  Large inequalities can intrinsically damage social well-being (Wilkinson and Pickett). Excessive shares of GDP going to the rich can constrain the scope for relieving low income, especially given environmental constraints to growth. Furthermore, where income inequality causes unequal distribution of power, it can alienate worse-off groups and damage democracy.

While the potential for negative consequences may justify objections to the concentration of high income, attitudes to inequality and redistribution are ambivalent. Public discourse is constrained by the lack of an agreed measure of who is “rich”. To develop such a measure is not straightforward. While excessively low income clearly prevents people meeting material and social needs, high income cannot easily be described in terms of having “too much” to meet one’s wants: individuals may always feel they could do with a bit more. Identifying social harm or social disapproval arising from a particular threshold of “excessive” consumption or income levels is more complex.

This research project, with CRSP Loughbrough and LSE, London, takes a first step in exploring whether a way can be found for the public to formulate a line above which someone is deemed to be ‘rich’, just as a poverty line signifies a threshold below which people are described as ‘poor’. Specifically, it aims to test whether a negotiated consensus among groups of members of the public on high, low and mixed incomes can develop such a concept, in a way that prepares the ground for a full study calculating a “riches line” or some similar concept. We will ask ordinary Londoners to draw on their experiences of living in London to identify what it requires to flourish, and what would be excessive income. It will look at this from the perspective of low, middle and higher income Londoners.

• Prepare the ground for full research on high incomes or a riches line.
• Starting to inform public debate on appropriate curbs on high income.
• Inform deliberations about higher-rate tax thresholds.
• Inform decisions about executive remuneration.

Project objectives:

i) To explore with members of the public from different socio-economic backgrounds whether there is scope for reaching consensus on how much one needs to consume to have comfortable living standard to which people aspire.

(ii) To discuss what level of financial resources go beyond this to bring people to a level that we would consider “rich” - in the sense of being required only for a level of consumption that society regards as excessive or unnecessary in meeting a normal range of material goals, or of giving people unfair advantage compared to the rest of the population.

(iii) To recommend on the basis of this evidence whether it would be possible for further research to establish such a line identifying at what income (or other threshold) one becomes rich, and if so what approaches and definitions such research should use.

• Professor Karen Rowlingson, Professor of Social Policy and Deputy Head of College of Social Sciences, University of Birmingham.
• Professor Donald Hirsch and Abigail Davies, Centre for Research into Social Policy (CRSP), Loughborough University
• Dr Tania Burchardt, Centre for Analysis of Social Exclusion (CASE), London School of Economics and Political Science
• Professor Ian Gough, Emeritus Professor of Social Policy, LSE

Trust for London

The project builds on some of the arguments in Wealth and the wealthy, Exploring and tackling inequalities between rich and poor – Karen Rowlingson and Stephen McKay (2012) Bristol University Press.

Read the full report: Living on Different Incomes in London: Can public consensus identify a ‘riches line’?

Read the summary report: Living on Different Incomes in London: Can public consensus identify a ‘riches line’?

See the CHASM news article announcing the launch of The Riches Line report.