Imagine a situation in which someone in 1980 is paid a premium price to build a premium product. Say a automobile with heated seats, electronic door locks and A

Imagine a situation in which someone in 1980 is paid a premium price to build a premium product. Say a automobile with heated seats, electronic door locks and AC... Then in 2014 it has migrated from high end (and premium paid) labor to being common place and performed by low end (and marginally paid) labor.. To me that situation is a decline in labor prices, despite the low end worker in 2014 making more in absolute terms than the 1980 worker. A 2nd analogy, If I make 10 widgets an hour and earn $10 an hour in 1980 and then 30 years later make 100 widgets an hour for $25 an hour ($10 plus about $15 inflation, we're not talking inflation here). I would consider that a declining labor cost-- The labor cost per widget went from $1 per widget, to $0.25 ... So, when I pay less or the same for a greater good, I consider that declining labor costs. Aside: this illustrates a major flaw in the CPI, you cannot compare a 2013 TV to a 1960s tv to try and say "the price of a TV has deflated by X" ...