Ok, you raised some very good points. first things first, you do get unemployment and sick benefits if you insure yourself, as self employed this is voluntary in Germany and in Austria you do get some basic coverage with statutory insurance afaik.

The specific case you described is not tax avoidance but tax fraud and anyone can replicate it or report it depending on their preferred moral inclination.

I'm talking about tax avoidance, again, I'm from eastern Europe and I know a _lot_ of people who have dependant sources of income but act as independent contractors despite working countless years for one employer and as a result paying much less on taxes despite having 5x income of average employee and this is taken out of said average employees salary who don't have the opportunity to work in high demand IT field whether due to education or not having above average IQ.

Of course there are a lot of people like you described in food, entertainment, maintenance or house building service who take cash on hand and never report it, but as said this is fraud not avoidance.