
Those are all true, and I’ll add one more: many times contractors have specific expertise that warrants higher pay.
The part I can’t reconcile basically relates to long-term contracts. I have one client who has been paying me for as much time as I can give them for about four years. On an hourly basis, I probably cost them 80% more than the fully-burdened labor cost of an equivalent W2 hire (including taxes and benefits and overhead). Or in other words, for the ~20-25 hours/week I do work for them, they could have someone working 40 hours a week instead. In this case, your second and third points aren’t really a factor, so I’m banking the extra as a “risk premium.” They seem happy to pay it.
In a rational and efficient market (myths, I know), they would have hired a full-time W2 person to do the work I’ve been doing, long ago. And I don’t really get why they haven’t.
Modern problems call for modern koans