Isn't the root cause of all of this, the high cost of employing people(as opposed to just contracting them). I don't know if it is the situation elsewhere but

Isn't the root cause of all of this, the high cost of employing people(as opposed to just contracting them). I don't know if it is the situation elsewhere but here in Mexico; the benefits than a low income employee gets are worth the extra employments cost; but for higher income, you just get too many taxes and little benefits, so it is costly for companies without the employees getting much. So people hire contractors to avoid paying so much in benefits that are not worth much.