Those are difficult questions. Are we talking about how "happy" people are? That's the goal for some people, and an official goal for Bhutan according to its constitution (https://en.wikipedia.org/wiki/Gross_National_Happiness). But I don't think we know very well how to measure it accurately.
It has been claimed that the move from hunter-gathering to agriculture brought a lot of misery while improving efficiency according to economic measures.
Do you think it's worse to be in the bottom 10%?
It's definitely not worse to be in the top 10%.
So where are we failing? Because I don't think we're failing anywhere on any medium-term horizon.
If you think we're failing from a short time ago, there's always ups and downs - but not a big reason to think the trend is reversing.