All of the above, generally.
Also: in this crappy economy, very often, someone who is absent a lot is the first one on the chopping block when the layoffs come. If you are “unreliable,” and if work gets done just fine without you, why do they need you?
When labor is a commodity, and when the next person behind you is more than willing to work sick and for less money than you make, you must be able to match that to keep your job. Letting “the Market” solve the labor problem may be cost-effective, but it sure is inhumane sometimes.