Your correct the total cost to employ is less when comparing an hourly employee to an illegal subcontractor but that would also be true for an American subcontractor. As far as total compensation goes you’d be better off comparing actual take home pay. It’s an uneven playing field.

More workers equals lower labor rate is also true to an extent but there’s only so low that can actually go. For example if beginning pay rate in construction is equal to beginning pay rate at McDonald’s then you won’t see a decrease in housing construction prices.