But you just pay _more_ for the contractors, at least if you hire locally. In my experience contract rates for comparable work any place you'd want to work are typically marked up (at least) enough to roughly compensate for the difference in benefits and taxes.

Especially now that remote for FTEs has become so common, there wouldn't be much motivation to take long term contracts otherwise. That may change if the job market goes pear-shaped, but doesn't seem like we're there yet.