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The Idle Rich

by Andrew Beveridge, Nov 30, 2006
 

Forgive New Yorkers for envying their fellow citizens; it's hard to avoid. Librarians read recently in the New York Times that their bosses at the New York Public Library each make hundreds of thousands of dollars a year. Teachers read in the Chronicle of Higher Education that many of the presidents in area colleges make about half a million dollars: John Sexton at NYU $798,989; Lee Bollinger at Columbia, $685,930; David Caputo at Pace, $672,239; Matthew Goldstein at CUNY, $471,500. But even Wall Street bonus babies, who are expected to be awash in money this year, reportedly complain because they aren't making as much as hedge fund managers.

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But however much doctors envy bankers, or lawyers envy managers, there is one group that may attract the most resentment of everyone -- the idle rich, also known as trust fund babies, and coupon clippers (an archaic term, dating from a time when one needed to clip a coupon to get interest from bonds). These are people who do not work, living on the money from investments –- their own, or their family’s.

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If there is resentment, there is also fascination. How else to explain Paris Hilton? E! True Hollywood Story even did a show on those “celebutantes” who try to cash in on their wealth to achieve stardom, including a quiz with such sly questions as:
Which heiress has a parent who not only competed in the Olympics but was once nominated for the Nobel Peace Prize?
Amanda Hearst
Zara Phillips
Athina Onassis Roussel
Paris Hilton

(The answer, to spare you taking the quiz, is Zara Phillips, the daughter of England’s Princess Ann, who competed as an equestrian in the Montreal Olympics and was nominated for a Nobel Peace Prize for her philanthropic endeavors).

The Village Voice looked at the issue last year in an article entitled Rich Little ‘Poor’ Kids, quoting most of them anonymously: "Those who bear the dreaded "trustafarian" tag say they have problems with guilt, embarrassment, and most importantly, figuring out what to do with their lives."

Several years ago, Melik Kaylan, writing in the Wall Street Journal as part of an ongoing debate over the estate tax, said that inherited wealth allows people “to lead lives on a higher plane.” In response, Timothy Noah of Slate wrote that while he was sure that “some people who inherit vast sums of wealth devote their lives to contemplation and philanthropy,” his experience led him to believe that “enlightened magnificos constitute a very small fraction, and are dwarfed by the number of head cases, drug addicts, and rustic dropouts. (Abigail Trafford of the Washington Post coined the marvelous phrase "WASP rot" to describe this phenomenon.) “ Following up a week later on his article, Noah tried to make good on a promise “to hunt down statistical data examining the lifestyles of the idle rich--incidence of alcoholism compared to the general population and that sort of thing.” He admitted to not having found much.

But now, using a bit of data analysis suggested to me by He Huang, one of my graduate students at Queens College, I have put together an admittedly tentative and incomplete profile (using material from the census and the American Community Survey) of New Yorkers who do not need to work.

There were about 140,000 in the tri-state area in 2005 who received at least $60,000 in investment income. (To receive such an amount would require at least $1.2 million in assets).

About one-sixth lived in Manhattan; almost two fifths were in the suburbs. Those in New York City who do not work for a living are older, more male, more likely married, more educated and less minority than New Yorkers as a whole. About three fifths have been to college. Over 80 percent are white, about nine percent are black, about five percent Asian and about 10 percent Hispanic. About 60 percent are male and about 55 percent are married with a spouse present.

The median personal income of those who do not receive any unearned income is $15,000 while for those that do it is at least $191,200 (and may be much higher.) Only about one-quarter of those who are receiving such income are working, and about 10 percent are making more than $100,000, so many members of the group choose to spend their time in other ways. Indeed, very few report social security income, business or farm income, retirement income or wages and salaries. In short, their investment income is their main source of income. They are substantially older than all New Yorkers older than 15, but even among the younger ones only a small fraction work.

Unfortunately, we can not put together a picture based on the statistical data of how they spend their time, though we know that only a few are working full-time. Some undoubtedly volunteer their time, spend time at vacation spots, or work at jobs that pay relatively low wages, such as docents in art museums or other rewarding pursuits. There are very few surveys that would have enough information to even begin to depict the idle rich.

Andrew A. Beveridge has taught sociology at Queens College since 1981, done demographic analyses for the New York Times since 1993, and been in charge of Gotham Gazette's demographics topic page since 2000. The opinions expressed are his alone. 


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