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Abstract: A common presumption in macroeconomics and development economics is that increased growth in the aggregate enhances welfare for everyone in the economy. I show that instead, if the underlying growth is a productivity increase in the sector consumed primarily by one group, the welfare of a second group may fall. I demonstrate this effect in two cases. In the first case, skill-biased technological change in sectors consumed by the skilled rich increases their income beyond the increase in economic wealth, causing a decline in the consumption and welfare of the low-skilled poor. This result stands in contrast to the standard model of skill-biased technological change. The second case examines trade between two countries, and demonstrates circumstances under which an increase in productivity in the nontradable sector of one country causes a welfare decline for the other country. The paper discusses evidence in support of the effects in both cases. This analysis demonstrates that a rising tide need not lift all boats and that the precise nature of consumption patterns is important for welfare