Dan,
Your arguments fly in the face of reality, because in todays' work environment, many companies, who have downsized in the past, have elected, for whatever reason, to bring workers on as "consultants", or "contractors." In fact, here in the insurance capital of the world (Hartford, Connecticut), many of the large insurers have laid off tons of workers, only to rehire lots of them as consultants, or individual contractors. They even work on the exact same stuff they worked on when they were actual employees. In fact, in many cases, these individuals are better off, because although they don't receive the same benefit packages that someone doing the identical job, who is an "employee" would be getting, they are compensated by receiving a higher salary than they did as an "employee." And again, if they didn't want to do the work, or thought that they were getting a raw deal, well, they could have just turned it down. Most folks don't. As well, this technique is not just applied in the private sector, but also in Government, from your local to your national, with lots and lots of people working for the Federal Government, doing the same job as the federal employee they sit next to, but as a contractor, either working for themselves, or working through another firm, who bills the government directly and then cuts a payroll check for the guy actually doing the work.
JJ