Both measures may be important. Of course, in terms of wealth, most Americans are better off if you pick a long enough time scale. However, wealth is not a perfect measure for quality of life. For example, a car is not the same proposition to me that it was to someone in 1910. For me, having a car is a necessity that borders on being a burden. Do I have a car, or must I have a car? It might be maddening, but the goal posts are always moving and are very much positioned not just relative to 'what once was', but even more by 'what we think ought to be'. It's a good question. There have been studies of wealth inequality that have suggested as much, but the correlation doesn't seem to be a strong one. My guess that it is one factor among many. I doubt that income inequality tends to promote a feeling of well-being for all parties.Who cares? Would any members of the middle class be better off if all those upper-income households vanished?