This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/magazine/8151355.stm
The article has changed 10 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Just what is a big salary? | Just what is a big salary? |
| (9 minutes later) | |
| Boris Johnson refers to £250,000 a year as "chicken-feed". Manchester City offer six figures a week. Goldman Sachs doles out big bonuses. BBC bosses face flak over their earnings. But just what constitutes a "big" salary these days and how has how we feel about them changed? | |
| Rarely a day seems to pass these days when there is not soul-searching over how much people are paid, whether it's bankers' bonuses or public sector salaries. | Rarely a day seems to pass these days when there is not soul-searching over how much people are paid, whether it's bankers' bonuses or public sector salaries. |
| But are we clear about the levels of earnings that we are worried about? | But are we clear about the levels of earnings that we are worried about? |
| WHAT'S AN AVERAGE SALARY? | WHAT'S AN AVERAGE SALARY? |
| Before you even get into what constitutes a "big" salary in the UK, you must first tackle the question of what an "average" salary is. | Before you even get into what constitutes a "big" salary in the UK, you must first tackle the question of what an "average" salary is. |
| Boris Johnson said his £250,000 fee for a weekly column was 'chicken feed' | Boris Johnson said his £250,000 fee for a weekly column was 'chicken feed' |
| The Office for National Statistics' Annual Survey of Hours and Earnings (ASHE) provides some of the most reliable figures. | The Office for National Statistics' Annual Survey of Hours and Earnings (ASHE) provides some of the most reliable figures. |
| According to ASHE, "mean" gross annual earnings for adults in full-time employment in 2008 came to £26,020. You may think that's rather a high "average" salary. | According to ASHE, "mean" gross annual earnings for adults in full-time employment in 2008 came to £26,020. You may think that's rather a high "average" salary. |
| Another way of measuring it is "median" gross annual earnings. According to ASHE, this was the more modest figure of £20,801. If you are earning that sum a year, you are "Mr or Mrs Mid-Point" - precisely half the surveyed working population earns less than you and half more. | Another way of measuring it is "median" gross annual earnings. According to ASHE, this was the more modest figure of £20,801. If you are earning that sum a year, you are "Mr or Mrs Mid-Point" - precisely half the surveyed working population earns less than you and half more. |
| SO WHAT IS A BIG SALARY? | SO WHAT IS A BIG SALARY? |
| It's safe to assume that for many people, mere entry into the top half of the earnings pyramid does not mean you are earning a "big" salary. | It's safe to assume that for many people, mere entry into the top half of the earnings pyramid does not mean you are earning a "big" salary. |
| How about the top 25%? A gross annual salary of £31,759 gets you into that club. | How about the top 25%? A gross annual salary of £31,759 gets you into that club. |
| Attitudes towards wealth have shifted repeatedly | Attitudes towards wealth have shifted repeatedly |
| How about if you make the top 10%? The ASHE figures reveal that a salary of £44,881 is enough to just edge into that top bracket. | How about if you make the top 10%? The ASHE figures reveal that a salary of £44,881 is enough to just edge into that top bracket. |
| A gross annual salary of £58,917 gets you into the top 5%. | A gross annual salary of £58,917 gets you into the top 5%. |
| But the standard that has cropped up in newsprint over the years is "the top 1%". It takes £118,027 to get into this bracket. And if you are earning £150,000 - the amount that triggers 50% income tax - you are in the top 0.6% of salaried people, according to the ASHE. | But the standard that has cropped up in newsprint over the years is "the top 1%". It takes £118,027 to get into this bracket. And if you are earning £150,000 - the amount that triggers 50% income tax - you are in the top 0.6% of salaried people, according to the ASHE. |
| So does that mean that if you earn £45k that you are in the country's top 10% of earners? Sadly it's not as simple as that. The ASHE is a sample of 1% of people who pay tax via PAYE. It doesn't include the self-employed - businessmen, contractors etc - who make up the ranks of the really wealthy. | So does that mean that if you earn £45k that you are in the country's top 10% of earners? Sadly it's not as simple as that. The ASHE is a sample of 1% of people who pay tax via PAYE. It doesn't include the self-employed - businessmen, contractors etc - who make up the ranks of the really wealthy. |
| And many of those who we think of as being "employed" and therefore having a conventional salary - such as footballers and light entertainment stars - in reality sometimes receive their money in different ways. A television presenter might be self-employed and effectively offering his service as a contractor. | And many of those who we think of as being "employed" and therefore having a conventional salary - such as footballers and light entertainment stars - in reality sometimes receive their money in different ways. A television presenter might be self-employed and effectively offering his service as a contractor. |
| Boris Johnson's salary as Mayor of London takes him into the country's top 1%, but his "chicken feed" element of £250,000 - his fee for writing a column - could be paid as a conventional salary, or not. | Boris Johnson's salary as Mayor of London takes him into the country's top 1%, but his "chicken feed" element of £250,000 - his fee for writing a column - could be paid as a conventional salary, or not. |
| DO WE KNOW WHAT BIG EARNERS ACTUALLY EARN? | DO WE KNOW WHAT BIG EARNERS ACTUALLY EARN? |
| We know a bit about what chief executives of publicly listed British companies earn, but not as much about executive pay as they do in the US, says Dr Vicente Cunat, of the London School of Economics. | We know a bit about what chief executives of publicly listed British companies earn, but not as much about executive pay as they do in the US, says Dr Vicente Cunat, of the London School of Economics. |
| "In the UK they do disclose their salaries, but it is in a relatively opaque way," says Dr Cunat. | "In the UK they do disclose their salaries, but it is in a relatively opaque way," says Dr Cunat. |
| And even if you were to do a wide-ranging survey of pay among executives in the City - the place where most Britons assume the biggest wages are being earned - it wouldn't tell you the whole story, says Dr Cunat. There would be cases where individuals who were not top executives - such as star traders - earned more than their bosses. | And even if you were to do a wide-ranging survey of pay among executives in the City - the place where most Britons assume the biggest wages are being earned - it wouldn't tell you the whole story, says Dr Cunat. There would be cases where individuals who were not top executives - such as star traders - earned more than their bosses. |
| Wealth and income have usually been tolerated if there is upward mobility Prof Bill Rubinstein | Wealth and income have usually been tolerated if there is upward mobility Prof Bill Rubinstein |
| Throw in the fact that conventional salaries are augmented by bonuses and long-term share options, and it's hard to get a fix on what is really being earned. | Throw in the fact that conventional salaries are augmented by bonuses and long-term share options, and it's hard to get a fix on what is really being earned. |
| There are some professions where it's possible to get a rough idea from recruitment firms that can aggregate offered salaries and candidate's previous salaries. | There are some professions where it's possible to get a rough idea from recruitment firms that can aggregate offered salaries and candidate's previous salaries. |
| Recruitment firm Reed's salary report for 2009 suggested the average salary for finance directors of financial services firms was £94,000, for pharmaceuticals firms £89,000 and for manufacturing firms £78,000. | Recruitment firm Reed's salary report for 2009 suggested the average salary for finance directors of financial services firms was £94,000, for pharmaceuticals firms £89,000 and for manufacturing firms £78,000. |
| A top qualified accountant might earn £100,000, suggests Brenda McManus, managing director of Reed Accountancy, but those jobs are few and far between. | A top qualified accountant might earn £100,000, suggests Brenda McManus, managing director of Reed Accountancy, but those jobs are few and far between. |
| WHAT DO WE THINK ABOUT PEOPLE ON BIG SALARIES? | WHAT DO WE THINK ABOUT PEOPLE ON BIG SALARIES? |
| Perhaps the most quoted thing that New Labour architect Lord Mandelson ever said was that "we are intensely relaxed about people getting filthy rich". He has subsequently complained that people always omit the other clause from the sentence - "as long as they pay their taxes" - but the fact remains his words are used as evidence of attitudinal change. | Perhaps the most quoted thing that New Labour architect Lord Mandelson ever said was that "we are intensely relaxed about people getting filthy rich". He has subsequently complained that people always omit the other clause from the sentence - "as long as they pay their taxes" - but the fact remains his words are used as evidence of attitudinal change. |
| There has been a more accepting attitude to wealth in the UK from the 1980s up until the recent financial crisis, says Prof Bill Rubinstein, from the University of Aberystwyth, an expert on the history of the wealthy. | There has been a more accepting attitude to wealth in the UK from the 1980s up until the recent financial crisis, says Prof Bill Rubinstein, from the University of Aberystwyth, an expert on the history of the wealthy. |
| Once upon a time tax rates made life harder for the aspirant rich | Once upon a time tax rates made life harder for the aspirant rich |
| "Wealth and income have usually been tolerated if there is upward mobility. When there isn't, it isn't tolerated. One reason it's controversial now is precisely because a lot of people are not benefiting. | "Wealth and income have usually been tolerated if there is upward mobility. When there isn't, it isn't tolerated. One reason it's controversial now is precisely because a lot of people are not benefiting. |
| "In the last 15 years unprecedented levels of wealth and income were tolerated around the world but this can quickly change." | "In the last 15 years unprecedented levels of wealth and income were tolerated around the world but this can quickly change." |
| The last decades have provided a contrast to most of the 20th Century when it was harder to become rich and attitudes were different, suggests Prof Rubinstein. | The last decades have provided a contrast to most of the 20th Century when it was harder to become rich and attitudes were different, suggests Prof Rubinstein. |
| "In the 20th Century there was a great deal of hostility for ideological reasons. Fifty years ago there was not only hostility from the left but a great many bars to becoming really wealthy." | "In the 20th Century there was a great deal of hostility for ideological reasons. Fifty years ago there was not only hostility from the left but a great many bars to becoming really wealthy." |
| Apart from anything the tax regime was "confiscatory", Prof Rubinstein says. | Apart from anything the tax regime was "confiscatory", Prof Rubinstein says. |
| In a recent essay, he cites the extraordinary example of an Inland Revenue officer who in 1953 claimed there were only 36 people in the UK with an after-tax income of £6,000 or more. This might equate £200,000 today. Their pre-tax income would have been £56,000 or more. | In a recent essay, he cites the extraordinary example of an Inland Revenue officer who in 1953 claimed there were only 36 people in the UK with an after-tax income of £6,000 or more. This might equate £200,000 today. Their pre-tax income would have been £56,000 or more. |
| But further back you can find examples of "big" salaries in the British Isles. In 1654, Oliver Cromwell was paid £70,000 a year, an astronomical sum. | But further back you can find examples of "big" salaries in the British Isles. In 1654, Oliver Cromwell was paid £70,000 a year, an astronomical sum. |
| Send us your comments using the form below. | Send us your comments using the form below. |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |