The average competence is NOT reducing. What is reducing is demand for mediocre (and low) competence.

This trend results in less competent people flooding the job market.

But if demand for low competence people goes down, those people aren't learning on the job, therefore decreasing the average competence of the workforce.

...said every generation ever about the next generation.

Sysadmins used to be able to compile a kernel and some could even hack a kernel module together.

Today ? Not happening.