Women entered the workforce in large numbers almost doubling the labor pool across the 1970s. This instantly stagnated wages. Meanwhile, all the things those women were doing at home weren't free, so cost of living also skyrockets. Pretty soon the reasonable "right to work from home" becomes "go to work or go broke"
Welfare state kicked off in earnest and corporate taxes were increased to compensate while it was removed from your pay via wages not keeping up with inflation.
Related to welfare, 60% of people pay ZERO or NEGATIVE income taxes. Rich people are paying for all those negative taxes and taking it out of YOUR paycheck. Then, because they are paying most of the taxes, they are the people politicians actually listen to.
You are outright lied to about inflation. The calculations were changed in 1980 by the incoming Reagan administration to make it look like their policies were more effective than they actually were. CPI indicates that inflation from 2000 to 2020 was right at 50%, but if you look at price comparisons for stuff in 2000 and stuff now, they've generally gone up 100% or more. You can see these shenanigans represented in things like how the wholesale inflation index is currently 2-3% higher than the CPI rate. When your employer says "we're giving you a 2% cost of living because that's the CPI" and real inflation is actually 4%, this adds up over the years.
Finally, even after accounting for everything, almost everyone is STILL getting screwed relative to inflation. We as devs think we have "the good life", but we're generally making LESS than median salary adjusted for inflation compared to programmers 30-50 years ago despite being massively more productive.