Roberts attempt to deny this economic truth by making statements about the ratio of labor costs to total costs do not hold water. It is the productivity of labor that counts and not any cost ratios or proportions. Moreover, all inputs contain labor costs. Though the purchaser does not define them as so in his own accounts, he nevertheless pays for them. Unfortunately we must pursue the matter a little further.
Firms combine capital with labor in a way to minimise costs.
In the absence of a technology requiring fixed proportions, prices will determine the combination. Even where labour 2 is a relatively small per centage of total costs, the combination will eventually be changed to minimise costs if the price of labor rises. I should add that some commentators have reduced labor costs to a ridiculous proportion of total costs by including sunk costs in their calculations. What matters is not whether prices per unit have fallen but the rate of return on these investments. The effect of raising productivity is to lower unit costs.