Since the 1980s, the wealthy have done fantastic while the rest have not done nearly as well. The argument from CATO and others is that we should be content with the majority of households taking home a shrinking share of an increasing pie so long as their absolute purchasing power isn’t decreasing, but that argument feels wrong in part because it’s human nature to measure status relative to others rather than in absolute terms.

Furthermore, wealth applies more pressure against certain costs like housing[1] than against others like food or durable goods. Cheap toasters only go so far in making people feel like they aren’t falling behind.

[1] https://www.jchs.harvard.edu/blog/home-prices-surge-five-tim...