Contractors generally don't have benefits. I've been contracting for over a decade and have paid for insurance out of my own pocket the entire time.
I also don't get why they are complaining about their wages. They took the contract with the understanding that they would get paid a certain amount. If you want more, negotiate for more.
I gave my self a raise last year by doubling my rate. Some companies didn't accept it, but I not only found plenty that did, but the quality of the work is far superior.
If you don't want the risks of being a contractor, which is essentially like running your own company, get a full time job.
Your pay, whether you're a contractor or salaried is more or less related to your leverage with your employer. Was that really their 'sole employer' in their market? If so, they don't have a lot of leverage, and for the sort of work they were doing they probably couldn't expect good pay as salaried labour either.
Don't get yourself into a position where you have a 'sole employer'. Always be prepared to walk.
Could you expand on this a bit? How does the increased pay help improve the quality of your work?
