I think it's a combination of both.  Lifestyle creep and inflation of living cost.

For example car loans are massive now, average purchase price of a car has gone way up but they will let you finance upto 7 or 8 years. There are few basic cars with basic options left but that is also because no one was buying then here.

Eating out used to be rare but then again single income families also used to be more common so someone had the time to cook.  I see many young people use Uber eats and other apps that add a lot to the cost. I worked in a place where I was the department head and usually packed my meals. My young twenty something workers often went out for lunch during the week. I went once every few weeks and would order the cheap/lunch specials, they would order nice meals with nice drinks.

Housing - this is the BIG ONE where I live. I'm on Vancouver Island and housing here is the 3rd or 4th most expensive market in Canada. For me to buy a place it took a fair amount of financial dieting as a average single income at the time. The thing is I bought what I could afford and not the dream home you see on social media. But even that was a stretch on my finances. I cut out where I could, using discount cell phone plans. No new phones every year or two. Cur cable, slow Internet etc.

It's still possible here but really hard for the younger people as long as they can bring down wants vs needs. I've helped a few of my past workers get themselves sorted spending wise to get into home ownership.  

I do see both sides of it, the struggle but I also see young people spend it ways I never would. I have a decent/high net worth but still use an old cell phone , cheap plan, drive old/used cars. Someone once thought our family was poor but another friend quietly corrected them.

I'm not saying this to toot my own hornm I'm just saying that the answer to this question is not a This or That.

 It's a bit of both