It's not only a misconception on this forum--I've been reading the same crap on precious metals sites for years now, and it's a way that the gold & silver permabulls hype metals and show how they apparently keep pace with inflation.  But anyone with a brain ought to realize exactly what you pointed out, OP.  None of us are earning 1920s (or pick your year) wages or paying 1920s prices for things.  If you consider that labor is just one more thing that gets priced in terms of US dollars, it makes sense that its price has inflated along with everything else, i.e., wages have increased along with the price of food, housing, gas, whatever.

No doubt, but we're talking about economics and not hard science.  And economists tend to disagree with each other on a lot of things, so I'm sure we'll see the CPI redefined several more times before we're dead.