After examining some of the wishful thinking going on in the recovery cheerleading, it’s time to take a look at an area of genuine improvement for workers.

Yes, there is improvement, but it’s not coming out of the unemployment numbers. Instead, it’s buried in the statistics for temporary workers. In March, the economy added 40,200 jobs, the most since December of last year.

This builds further on 49,200 temporary jobs added in January, and 36,700 in February. Over 300,000 temporary jobs have been added since last fall.

Now, temp work is a controversial subject. Because temp jobs offer no benefits and generally lower pay, they don’t provide real security for workers. And because temp workers, especially in a recession like this, are sometimes replacing full-time paid employees, they’re not always a popular addition to the workplace.

But as Joseph Pisani over at CNBC points out, temporary work has a particularly important role in a recession: it can be one of the first indicators of real recovery. What’s more, employers tend to hire temporary workers on permanently as the economy improves, which is beginning to happen.

Companies began converting staffers from temp to permanent positions in late December but “it picked up steam” in January and February, said [Rob Wilson, president of staffing firm Employco Group], a trend that other firms–Adecco, Manpower, and Kelly Services–have also seen. But while the hiring of permanent employees is a positive sign, experts say it’s slower than in past recoveries…”It’s a little slower, but the pace is picking up,” adds Mike Webster, executive vice president of Kelly Services.

There are many, however, who believe “the era of the temp is more than temporary,” as Business Week magazine put it in a cover story in January.

The article argues that this trend has been developing for years now, especially with a focus on short-term profits encouraging managers to cut labor costs whenever possible.

Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania’s Wharton School, says the brutal recession has prompted more companies to create just-in-time labor forces that can be turned on and off like a spigot. “Employers are trying to get rid of all fixed costs,” Cappelli says. “First they did it with employment benefits. Now they’re doing it with the jobs themselves. Everything is variable.” That means companies hold all the power, and “all the risks are pushed on to employees.”

Perhaps the most remarkable aspect of the move toward temporary workers, as described by the Business Week article, is the shifting identity of the temporary worker. Temp work is not just for entry-level positions anymore.

The world of temporary work used to be the domain of sneaker-footed admins. No longer. Last year, Kelly Services placed more than 100 people—including lawyers and scientists—in interim stints that paid more than $250,000 a year. At the forefront of the “leadership on demand” movement in the U.S. is the Business Talent Group, whose roster of 1,000 executives has done jobs at companies like mobile-phone content provider Fox Mobile, health-care company Healthways, and private equity firm Carlyle Group. BTG says its client demand rose 50% in 2009.

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