Contractors

I know a few government contractors. They all seem to make many times as much money as actual government employees.

Looks like that isn't just my small sample size. Sure enough, private contractors are more expensive than government workers in a wide variety of fields. This shouldn't be surprising. Government workers get part of their benefits as really secure jobs. Therefore you would expect them to be willing to work for less.

I have become pretty skeptical about contracting out work in general. Some utilities have gone as far as contracting out almost all engineering. Of course, what is the inevitable outcome of this? Yes, if no one at your company understands what they own than sooner or later you get held hostage. Employees might not be all that loyal, but they at least think of themselves as on the same team as other people at the company. Contractors are much more likely to have a mindset of taking the company for all it is worth. There is a place for it of course, but only for work where you do so little of it that you cannot afford enough full time people to get the necessary economies of scale to do the work efficiently.