There are many ways our lives are better. See for example infant mortality. To be born mere sixty or eighty years earlier would mean for me personally to die at three months of age. All my time is extra time if you look at it from this perspective.
"Hey, at least I'm not dead." as the answer to "Why haven't we seen meaningful increases in free time for first world workers over the past three decades?" is a real head-scratcher.
AI will similarly increase out productivity but the work will still continue, because humans are an inexhaustible species, we always want to do more and more.
It's not an exclusive choice either. At least in Europe, the amount of free time grows with each generation. 37.5 hours per week, 5 weeks vacation and many bank holidays is a significant change from how much people worked in the fifties.
Yes, we can do better. But both our wealth and our free time are visibly improving.