Take the example of a cleaning company. They’re competing with dozens of other cleaning companies to provide services for Cool Startup. Cool Startup will likely choose the cleaning company with the lowest bid—and the lowest bid comes from the company that pays its workers the least. Now, the owners of Cool Startup might never have deigned to pay its own employee so little—that would be bad PR!—but when services are subcontracted out, it can feign ignorance of the entire pay structure.
