That's a pretty common rationalization to justify a certain hands off management approach. It's easier to scale certain businesses by just running them at arms length.
My first job was on a small family farm at age 12 -- we worked very hard but were treated fairly and well. The owner of the business would be hip-deep in the muck with us and was fully accountable for everything that happened on that farm. After that I moved on to different jobs in the mall, culminating in a semi-commissioned sales job that got me through college.
In that environment, you learned very quickly that most of the workers in that mall were completely disposable, and a significant population were discarded when the car that was handed down to them broke down or they were unable to float insurance. No car == bus, and more bus == more late arrivals, which resulted in termination.
The worst employers were run in a hands off way with straw-bosses (ie. people making 7.25/hr vs. 5.75/hr circa 1995) running the place, and the hire/fire decisions were made by an owner or manager at arms length. This was common with the smaller retailers, some behind the scenes jobs, and the food court. The turnover was 50% a week in some cases, and they would just over-hire and fire (or drop hours to nothin). The best paid gigs were janitorial and back of house restaurant workers -- they worked hard, but had steady work and often made off-book money. The easiest gigs were places with a salaried manager, and they usually had a cadre of full-timers backed by a bunch of part-timer people.
In the middle you had places with commissioned people, and there was always a tension between having too few and too many employees. Too many and your best salesmen would leave (and profitability drops, as you need salesmen to move margin enhancers like service plans), too few and you'd lose volume.