I will say one thing I kind of disagree with on your post - and that's the Group C (the union MSO employees) getting paid so well...most of the guys we know who are employees get crap pay, that is why many of them become subcontractors. I'll have to take the time and really re-read your theory to come up with an answer...since you seem to have put alot of thought, time and effort into it.
As for the illegals, I'd report the MSO employer to ICE and hopefully that would take care of the illegal alien problem....
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I know you seem pretty pro union, but even union places are trying to cut wages now....including Ford and GM, Try-It (beer distributor) - it's been a slow process, but I bet if someone really tracked it, it would be interesting....the rich keep getting richer.....
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Catch ya later.