In fact, even today in many places in the world (India and Africa come to mind), artisans still produce fabrics, clothes and other low-tech products by hand for way less than American minimum wage [2].
I'm not a historian by any means, but it is my understanding that before the industrial revolution the major cost of production was the cost of materials, and the cost of labor was marginal. Contrast this with modern production, which is continually occupied with reducing the cost of labor, either by automation or by offshoring to third-world countries.
[1] Of course, any kind of cost comparison across 8 centuries is suspect. A quick search produced this: http://faculty.goucher.edu/eng240/medieval_prices.html
A peasant's linen chemise is listed as costing 8d in 1313, which is equivalent in purchasing power to anywhere between GBP 22.30 to 5970, depending on the index, according to this:
http://www.measuringworth.com/ukcompare/result.php?year_sour...
[2] http://www.bls.gov/fls/ shows cost of labor for different countries in recent years. According to the site the average hourly compensation in India in 2010 was $1.46.