The negative side of this however, is that those people actually trying to run a legit business, paying for insurance, advertising, and investing in expensive equipment... Have to compete with people offering lowball pricing for rainy day money.
There was a guy around here on Craigslist offering to brush-hog for like $25 or $30 per acre... But the industry pricing is anywhere from $50-75 /acre depending on conditions. That guy is negatively affecting the market by causing actual companies to lower industry prices just to compete. You mention a responsibility to "keep a lid on things" but how would you feel if you put sometime out of business by low balling jobs, thus negatively affecting expected standard revenues?
If my business and its operation is legal, acting morally, is not hanging customers out to dry, and can help me and employees make a living, then the fact others are overcharging or have made decisions that have lead them to have a bloated cost base they are unwilling to correct, should be their problem not mine.
But, this is where I come back to fairness more often than not, and our collective responsibilities towards efficient market mechanisms. If people are not running a legal business then they are not playing fair and for the system to work efficiently we have a responsibility to expose them and guard against illegal behaviour.
Rules are there to avoid lowballers leaving customers high and dry or not paying their share of taxes/etc, or at least should be, and it's up to every single one of us to uphold societal rules lest society continues its slide into an immoral abyss.
Furthermore, apart from those instances of genuine ignorance, the customers of the rat-bag operators who know or reasonably should suspect the business is not paying its taxes or treating staff poorly, or simply cannot do the job well legally at those prices, need to stop enabling that behaviour and are just as bad as the rogue operators.
I get my fair share of people wanting to pay cash for a discount. The inference being if it is cash I don't have to declare the income, don't pay tax on it and therefore should be able to do the job cheaper. They are no better than the ratbag operators in my opinion. There was a report here in NZ not long ago that estimated tax evasion was higher than our currently over-stretched national health budget. This is but one reason why I feel my generation has failed in its duty of stewardship and governance.
*editing to add*
If we continue to focus solely on expected revenues, without due regard for the undeniable fact that our revenues are somebody else's costs and ultimately this will reflect in our own costs of living or that of future generations, then we will never break free from the shackles of unsustainable expectations and rising costs, this blind adherence to totally ridiculous definitions of perpetual economic growth that snowballs into an unsustainable train wreck. How many boom and bust cycles must society endure before it does enough to learn from history and actively knits the avoidance thereof into what's left of the moral fabric of society?