Productivity has risen, but it isn't a tide tide that raises all boats. Look at what has boomed since the 70s, finance and tech. Finance because markets were liberalized and the economy financialized. They are at the junction where capital gets allocated in the economy, so they are able to take rents on all the capital that flows through them. The more money moving around the more they slurp up. Tech is where the lions share of productivity was created. All of the huge tech companies are able to leverage the internet to reach a market way larger than any physical store could before. A software development team is automating the workflow that would have gone to physical store employees running a Sears or whatever, a company manufactures a machine that does the work of 5 people 10 times faster, etc. That is why they get paid so much.

Meanwhile the rest of the economy de-industrialized, manufacturing jobs became more scarce because technology increased productivity, whatever was too labor cost intensive went overseas, and whatever jobs couldn't be offshored, retail and service jobs, aren't capable of having the same productivity gains as what was happening in tech. There are pretty hard limits to what restaurant staff, or retail employees, or other regular jobs can do to become more productive. That is why their wages are stagnant, the only reason those jobs exist is because they can't be exported, in some places they even import foreign workers to do those jobs to keep wages low. This is why unions fell out of favor, labor has no leverage anymore since their jobs can just be exported, or they cant but they are low skill jobs so employers can just churn people or grab import immigrants to do it because employees are nothing more than cogs in a machine that Amazon hasn't figured out how to automate yet.

Keep in mind that this is all by design, capital was liberalized, economies globalized, college loans guaranteed, nimbys limiting development in real estate and energy, these were all policies that people wanted and politicians enacted, whether or not they were fully aware of the second order consequences which are why things feel so messed up now.