This comment, tells us that during the dark age, the living conditions in Muslim world were considerably better than that of medieval Europe.
Even it this was true for the people at the top, was it true for the "average" person?
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This may be off topic as Wikipedia has a pretty complete article on the Islamic Golden Age.
The short answer is yes, while European nobles were sitting on wooden/stone chairs in cold stone buildings, the Arab nobles were laying on comfortable carpets, living a pretty good life quite similar to the old Roman nobles, enjoying many exotic goods and luxuries. There are records of visiting Europeans being quite impressed by the lavish living conditions of the Arab upper-classes.
Of course, the masses of the people usually didn't have it so good and being part of the lower-classes during that time, whether in Europe or in the Muslim world, probably wouldn't have been as enjoyable.
There were however various public services in the Muslim world, like 24/7 hospitals that at some points were forbidden from turning away patients who could not afford to pay for healthcare. Education was also highly valued and public schools were available, as well as public libraries (the two would have often been combined). Sewers and clean water systems were functioning pretty good, and Muslims washed regularly (something that got adopted only later in Europe) which provided better overall hygiene.
Freedom of expression was also relatively higher (although not in the modern Western sens), and interestingly, many things said and written by Muslims during that era would seem unimaginable and heretic to some Muslims today.
During this period the Arabs made considerable advances in science, education, medicine, philosophy etc, basing themselves on the great works of antiquity. In the mean time European scholars were stuck with a very inflexible Catholic church. Italian merchants eventually brought these advances and "resurrected" ancient texts back to Europe which triggered the Renaissance, which also coincides with the end of the Islamic Golden Age.
What I mean by:
while European nobles were sitting on wooden/stone chairs in cold stone buildings
is that there was a severe drop in the standard of living of European nobles following the fall of the Western Roman Empire. They lost access to many of the luxuries goods from the East and much of the engineering, architectural, philosophical and medical knowledge known to the Romans.
Overall, life would have been more enjoyable in the Muslim world during the European Middle Ages. Assuming of course that you were lucky enough to be born a free man, which applies throughout History.
It depends what period of Medieval History you're talking about (since the term can often be a catch-all referring to everything from late antiquity to the Renaissance, or can specifically refer to the period after the High Middle Ages - 14th/15th centuries), and what specific parts of Europe and the Middle East.
Note that Europe was severely depopulated at the time, intensive agriculture hadn't so much been "lost" as was the fact that lands were allowed to go out of cultivation and much of urban living had been whittled down to a few towns of 10k populaces each.
Luxury goods were certainly lost however, there was a catastrophic loss of skilled workers that went hand in hand with the decline of urban living and so on. The period most people think of when they're talking about the really "dark" part of the Middle Ages is essentially Central and Western Europe following the end of Justinian/Belisarius' abortive attempts to retake the Western portion of the Empire. The period after the actual fall (476) wasn't particularly bad, Theodoric was actually a fairly good ruler of Italy. But the 7th and 8th centuries saw chaotic mass internal migrations, Europe itself besieged on all sides by hostile existential threats (The Sassanids and then the Arab Caliphate) and so on.
A few notes on other things, tangentially related:
Angus Maddison provides some historical GDP data on his website.
From this data, at around 1000AD the per-capita GDP of Europe is about 425 1990 international dollars (this figure is about 31,000 for 2008 USA). The two stand-outs are Spain and Italy at 450, likely due to trade and contact with the Arab world.
Compare this figure to the Middle-Eastern average of 621. It's not a big difference, but economic disparities of that time would have been much lower than today - peasants were more or less equally poor, but to an observer living in those times, the difference would have been easy to spot.
An indirect indicator is city size. Cities can only grow large when they, and the lands and trade routes that support them, remain well-protected long enough (and 50 years will do - cities can grow and decline very quickly). High living standards are hard to attain without cities.
Until 1800, the only cities under Christian rule with population exceeding 200,000 were Rome (300-400), Constantinople (500-1500), Paris (from 1300), Naples (from 1550), London (from 1600), Amsterdam (from 1700), Moscow and St. Petersburg (from 1750), Vienna (1790).
After Córdoba fell to the Christians (1200), its population (which had already dwindled due to instability under Muslim rule) steadily decreased to 20,000; after Constantinople fell to the Ottomans, its population quickly increased from 200,000 to 500,000.
The general picture: larger cities (200,000) would grow in the Islamic world from 700 (but not so much after 1000), in Romance speaking countries from 1200, and in Germanic speaking countries only after 1550.
This nicely coincides with the term 'Renaissance', the "lifting of the Dark Ages", which, I think, stands for the cultural developments that followed from the economic rise in Europe (in Italy and Paris from 1200, the Netherlands and England from 1300). So while this is only indirect evidence, it suggests a positive answer to your question.