Good conditions didn't diminish. People now buy vastly bigger and more things. Want to live on one salary like a 1950 person, with 1950 level goods, you can.
Also more classes of people now have much better things: women, minorities.
Labor is not the only input to productivity, so there is zero reason labor rewards should match productivity. As capital expenses increased to obtain modern productivity gains, the reward should go towards capital, which enabled purchase of upgrading tooling. Also as people demanded more rights and benefits, some is taken from wages. When you track total cost to employ, which is what an employer pays to have an employee, you can see all the gains. BLS tracks this and many other related variables (like wages, total remuneration, and a host of other costs and benefits employees have gained over the decades.)
And corporate margins are pretty much the same as ever, net profit ~10% of revenue, since time immemorial. That 10% is what provides cushion so businesses don't implode every hiccup, leaving lots unemployed. [1] has some 1950-now data. There's plenty more places to find more. Fairly constant profit is why stock returns have averaged what they did over 100+ years. If now had vastly more profitable companies, it would have vastly increased returns.
[1] https://cdn.pficdn.com/cms/pgim-fixed-income/sites/default/f...