1. The minimum required experience is also increased. You see this in industries where it's very difficult for new blood to break into because the minimum required experience/skill level is above an "entry level" position because the pay expectations of the industry require a certain degree of skill and experience going in.
2. Companies outsource. They seek to maximize profits, which means reducing costs, which means paying those with low demands for work that's good enough.
I actually moved out of the US for work because I found that I had better opportunities outside the US than in it. Not higher-paying (those would be in the US), but opportunities to build work experience from nothing, which I didn't see an option for in the US as a fresh college grad with a journalism degree looking to break into software engineering. I've been working outside the US for ~3 years now and although there have been challenges it's changed my life and career for the better. YMMV.