[MilnerRoute]

This was a long article, but I think it boils down to this:

"I believe that much of the rise of between-firm inequality, and therefore inequality in general, can be attributed to three factors: the rise of outsourcing, the adoption of IT, and the cumulative effects of winner-take-most competition."

[nol13]

"For example, contract janitors no longer receive the benefits or pay premium tied to a job at a big company. Their wages have been squeezed as their employers routinely bid to retain outsourcing contracts, a process ensuring that labor costs remain low or go ever lower."

I think possibly the most effective change that could be done along these lines is to change the laws to where hiring as few actual employees as possible is the only responsible business decision. One big part of this would be decoupling health care and possibly other benefits from place of employment, if not universal health care then just put everybody into the individual market by law.

Or close the 'contractor' loophole entirely, but that could be messy.