Problems of measuring living standards properly go way, way, way back, as Lemin Wu demonstrates:
...Technological improvement in luxury production... faster than improvement in subsistence production, would have kept living standards growing.... [There is] a puzzle of balanced growth between the luxury sector and the subsistence sector.... [The hypothesis is of] group selection in the form of biased migration. A tiny bit of bias in migration can suppress a strong tendency of growth. The theory reexplains the Malthusian trap and the prosperity of ancient market economies such as Rome and Song..."
Thomas Malthus (1809): "All other arguments are of slight and subordinate consideration in comparison of this. I see no way by which man can escape from the weight of this law which pervades all animated nature..."
Lionel Robbins (1998): "But in economics, the admission that mankind need not live at the margin of subsistence [...] meant that, the very long run limit of wages was not physiological subsistence, it was psychological subsistence—a much more complicated and difficult matter to formulate exactly..."
