The apparent decline in children's mental health seems to have started in late '00s or early '10s. E.g. here's a study from just before the pandemic making the same conclusion - digital media: https://www.sciencedaily.com/releases/2019/03/190315110908.h...

The decline has occurred in almost all developed countries, as far as I know. This includes countries where wages aren't stagnant and the employment market is solid.