Is Over-Use of Freelancers and Temps Abusive?

I have a friend who for nearly three years worked four days a week at a publication. She worked that schedule because if she were given five days of work instead of four, the company would need to change her status to full-time, and give her the same health benefits and paid vacation time as the other full-time employees. 
Finally, this past year, the company did the right thing, and made her full-time. Why did it take so long? Many companies have noticed the cost savings to be enjoyed by using freelance or temporary employees. The question is whether it’s ethical, and the toll this over-use of non-full-time employees puts on the company’s culture and morale. 
Sometimes even companies we think of as progressive have a blind spot in over-using freelance and temporary, employees. I saw a report last week about the negative impact National Public Radio employees felt from the organization’s use of a temporary workforce. “For decades, the public broadcaster has relied on a cadre of temporary journalists to produce its hourly newscasts and popular news programs,” Paul Farhi writes in the Washington Post. “Without temporary workers—who are subject to termination without cause—NPR probably would be unable to be NPR. Temps do almost every important job in NPR’s newsroom: They pitch ideas, assign stories, edit them, report and produce them. Temps not only book the guests heard in interviews, they often write the questions the hosts ask the guests.”
These temps have expressed great resentment to the company and others in recent months, Farhi notes, in the wake of a management sexual harassment scandal, and due to ongoing frustrations at the overall way they are treated. “Temps often were left in the dark about how long their assignments would last, how much they’d be paid, who they were reporting to, or what their title is. They also said they received little feedback from supervisors after completing an assignment, and were ‘routinely’ overlooked in NPR’s recruiting efforts.”
Does your company use temporary or freelance employees? What’s the difference between the two? It’s a distinction that’s always confused me. To my mind, all employees who are not full-time with the same benefits all the other employees have are temps. You could be a freelance employee with full-time hours, but aren’t you still a temp unless you’ve been officially hired in a full-time capacity?
One strategy, which some companies might already be implementing, is to create agreements for temps and all freelancers that outline the number of hours per week they can count on, and how many weeks of work they likely will have with the company. I say “agreement” rather than “contract” because I see why companies would be loath to create legally binding documents locking themselves into providing work and payment for a set time. At least the agreement, which could include a clause that it was subject to change, would ensure the temp and the organization were on the same page in anticipating the level of work that would be needed, and along what time frame. That way, temps would know well in advance when they need to have another job ready to move into. The agreement also could state that temporary employees will be notified of the reason for termination, should it occur. 
The benefits of treating temporary workers with respect is that other employees notice it, and it improves their view of the company they work for. They begin to see the company as more humane and worthy of their respect. They may start to work harder, and more loyally, with that improved image of the company in their minds.
Most of all, however, treating temporary workers with respect, is part of corporate social responsibility. With the season of charitable giving upon us, I’m reminded of the saying, “Charity starts at home.” It would be ironic if a company that prides itself on its generosity, giving millions of dollars to nonprofit organizations, did so while exploiting hundreds, or thousands, of temporary employees under its own roof.
What is the best way to train managers and executives to maintain a cost-effective, yet fair and humane workforce of temporary employees? How do you make the most of this mode of employment without becoming exploitive and cruel?