It has nothing to do with average performance and everything to do with the managerial class reducing the costs of labor. The situation I describe is similar to a situation in which Ford and GM in Detroit saying that we are going to cut our workforce in two. Half will be paid at 1/4 the rate of the other half and will only be hired half time. The half that are paid 1/4 of the rate and only work half time at GM are in need of money so they go get another half time job at Ford. Vice versa with the Ford workers. Labor costs are dramatically reduced even though the size of the workforce has not changed. Of course the auto unions would not let this happen whereas in the last 20 years this is exactly what has happened in higher education.
The Reagan years produced a corporate culture in which it became acceptable to fire workers and hire them back as consultants with no job security and lower labor costs to the company. Higher ed followed suite.
It used to be that corporate power controlled it's labor costs with guns and the Baldwin Felts agency. Nowadays, guns are not as socially acceptable but the basic relationship between management and labor remains unchanged, only constrained by legal limits and the ability to pay lawyers.

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13