Contractors have to pay all of that from their turnover - along with professional indemnity insurance, public liability insurance, accountancy fees etc.
And note I said turnover. There seems to be this misconception that all contractor payments go straight into the contractor's pockets. They don't, they are business receipts that go into a company. That company then pays the contractor.
What contractors do get is the ability to shift things around as they see fit. Employees are stuck with whatever structure of payments to make up "the package" is decided by the higher ups.
This was out of date in 1996. I agree with others that if it was 1986 there would be an excuse, but in 96, then he was giving out bad info.
We had already seen the rise and fall of Cello and Mosaic. Trumpet Winsock was envy where. Here in the UK we had services such as Demon offering an Internet connection for £10 a month. Internet magazine had been running for a couple of years. Hell even my book had been out for a few years (http://www.amazon.com/The-Internet-Via-Mosaic-World-Wide/dp/...) and was already totally out of date due to the fast moving nature of things.
I think it was around then that even CompuServe were moving from the traditional CSi back end over to fully Internet based systems.
The UK was pretty Internet savvy in 96. Far more than this consultant was, anyway.
Sub-title:
Technology firms want to pay the minimum they think they can get away with for people with "digital skills" and then complain when no-one wants to work for them.
I want to buy a nice town house in the middle of London / New York / etc. but they are all owned by property squatters who will only sell for a stupid amount of money.
You probably don't have teenage children.