The problem with that data set is that it can produce huge fluctuations due to exchange rate volatility. I think a better measure would include 'purchasing power parity'.
However, the above figures may not be a good indication of the increase in the standard of living for each county because:
(1) Japan has almost no immigration while US has had a huge influx of immigrants. My guess is that immigrants have lower incomes than the general population but much higher incomes than in their previous country. It is not fair to compare an immigrant's 2012 income with the average US income in 1995.
(2) USD GDP growth between 1995 and 2012 heavily favoured an elite, very small minority. The vast majority of the US population increased their average income by far less than 3.5% per year. I doubt Japan has skewed its income growth to the same degree.
You are, to my understanding, not correct about #2. I don't have a star for you off the top of my head. It is a bit difficult to compare transnationally because of the differing tax regimes of Japan and the US. CEOs of peer companies have similar lifestyles but in Japan they are on the books at low six figures in income, despite massive subsidization of their lifestyle by the company.
Basically, he argues (perhaps my interpretation) through statistics that income equality is very significantly related to what is typically considered a good country to live in, which in contrast to many, does not include salary/GDP and such monetary stats but rather how long you live, infant mortality rates, social mobility, etcetera, where the Nordic countries and Japan outperform all other countries (more or less) and where the USA have it really difficult to compete against other Western/developed nations.
Thus, one can quite easily argue that regardless of the adjusted GDP growth, Japan has managed to develop in a much more healthy way compared to the USA, which may be because of the quickly rising income equality.
For example: http://en.wikipedia.org/wiki/List_of_countries_by_past_and_f...
Japan:
1995 - $22,955
2012 - $35,724
Average growth: 2.6% per year
United States:
1995 - $28,763
2012 - $51,709
Average growth: 3.5% per year
However, the above figures may not be a good indication of the increase in the standard of living for each county because:
(1) Japan has almost no immigration while US has had a huge influx of immigrants. My guess is that immigrants have lower incomes than the general population but much higher incomes than in their previous country. It is not fair to compare an immigrant's 2012 income with the average US income in 1995.
(2) USD GDP growth between 1995 and 2012 heavily favoured an elite, very small minority. The vast majority of the US population increased their average income by far less than 3.5% per year. I doubt Japan has skewed its income growth to the same degree.