Nominal wages in the US have most certainly gone up since 1968 a great deal, this much is really obvious. You might be talking about real wages, but those are irrelevant when we talk about sticky prices, because people don't accurately understand the changes in their real wages over time (and those have also gone up, though not as much as some people would expect).

Similar to your point, executives don't like seeing the number on their costs go up.

Yes, but they do go up, so they try to exploit quirk of human psychology to reduce the impact of rising costs on consumers.

Isn't it possible that quality could take a hit in how the executive chooses to reduce costs?

It sure is possible, and no doubt happens with lots of products across the board. Usually, it is wrong move, and the company eventually succumbs to competitors.