Q: Does it matter that there’s an increasing gap between the rich and the poor if the standard of living for the poor keeps going up? (submitted by wendy180)
A: Yes, it would, even if it were. Second item first: there are lots of different ways to measure standard of living (the most common is per-capita GDP - a measure, as fully explained in The Little Big Number, which is fraught with failures and shortcomings). To put it mildly, there is very good reason to doubt that the standards of living keep going up - in general, and particularly for the poor. Indeed, there is increasing evidence that suggests that rises in GDP create more poverty than they alleviate (think clear-cutting forests or depleting oil reserves through fracking - an immense short-term plus in GDP with long-term devastating results on people, communities, ecosystems). In terms of inequality: a large and increasing gap in wealth is a bad thing all around - it undermines incentives, destroys communities, disables democracy, and leads to higher levels of everything from alienation and divorce to crime and job insecurity. High levels of inequality are a lose / lose proposition.
It should also be pointed out that most people vastly underestimate the actual levels of inequality (see, for instance, chart below). Forty years ago, CEO's made roughly 30 times as much as the average workers in their companies. Today they make some 350 times as much. The minimum wage in the U.S. today is $7.25 - working full-time (40 hours a week), that adds up to roughly $15,000 a year. Or just about the exact amount Fortune 500 CEO's make in one hour (yes, that is one hour, before bonuses and all sorts of other privileges thrown in).