remember full-time work?

According to a report last week by the Scottish Parliament's Economy, Energy and Tourism Committee, the equivalent scourge today is underemployment – people working fewer hours than they need to or want to, or working in jobs beneath their skills capacity. While the Scottish Government believes that "levels of underemployment will reduce as we continue to emerge from the economic downturn", it has pledged to learn from the report.

The committee heard "stark evidence" of the personal impact of underemployment "whose effects are similar to those caused by unemployment" – and which disproportionately affects women – though it noted the widespread belief that half a job is better than none.

The report does Scotland a valuable service, by defining – within the limitations of poor data – the human effects of changing working patterns. It makes clear that, even before the banks crashed in 2008, "flexible working" was a new fact of life. However, the slump, and the economy's stubborn reluctance to recover, has allowed its negative side to calcify.

According to estimates, in 2012 around 264,000 Scottish workers – nearly 11% of the workforce – were underemployed, a figure that had risen by 76,000 since the onset of the slump. Although not all of these workers will be unhappy with this new reality, it seems likely to have been bad news for most of them, and for their families.

"Underemployment is a difficult one to evaluate," according to economist Professor John McLaren of the Centre for Public Policy for Regions (CPPR).

"It has the potential to build into a significant problem if, as in the 1980s and 1990s, government accepts this as a way of disguising rising unemployment. As such, it threatens to undermine the idea of a minimum or living wage applying across all jobs."

The phenomenon has many manifestations, some more benign than others. It includes "labour hoarding" – keeping people on with not enough work to occupy them to save finding new workers when things recover – and "displacement", where higher skilled workers are taking jobs fit for younger workers, and the increasing trend for self-employed part time jobs.

Citizens Advice, which supplied the Sunday Herald with an anonymous file of its Scottish clients illustrating the human cost of underemployment, has one example from northwest Scotland that shows how the underemployed are prey to unscrupulous employers:

"[Our client's employer] tells all their workers they are self-employed. This allows the employer to avoid paying the minimum wage, sick pay, holiday pay and national insurance contributions.

"The client has been working for this company for about seven months planting trees. The client is not paid an hourly rate but a piece rate for each tree planted and the travelling time (three hours) is unpaid. This means that the client is effectively earning significantly less than the minimum wage."

More systematic, and probably more widespread, is the rise in "zero-hours contracts" where the employer does not guarantee the employee a fixed number of hours a week but requires them to be on call when required.

Although most notably used in Scotland by Amazon.com – itself a beneficiary of lavish public-sector inducements – zero hours are sometimes used in the public sector, including in healthcare and education, prompting a demand by the EET Committee that the Scottish Government "ascertain the degree to which zero-hours contracts are used by the public sector and their contractors and report back to the committee".

Murdo Fraser, the committee's convener, says: "Underemployment has always been there, the debate now is about whether it will continue when a full-scale recovery takes place.

"Although [Finance Secretary] John Swinney said in his evidence that he expects it to be temporary, there have been specific structural changes in the labour market and these are fundamental shifts that we don't expect to be reversed.

"Lots of companies now use practices such as taking on people as self-employed contractors rather than employing them full-time, and while we did hear some evidence that some people like the flexibility of such things as zero-hour contracts, we think their rise is negative because of the impact on the security of people's lives, the difficulties it causes with the benefits system and wider issues about people's sense of self-worth and personal security."

While many see the term "flexibility" as a weasel word in this context, there is a consensus among economists that it is better than mass sackings. The lesson of the 1980s was that workers cast out of the world of work can find it almost impossible to get back in again.

Professor Brian Ashcroft, an economist at Strathclyde University, said: "Margaret Thatcher contributed largely to this more flexible labour market and while I'm not saying we should all be grateful to her, the downturn shows that flexibility has strengths as well as weaknesses, in that it allows firms to bargain over working hours with their workers. Positive labour hoarding is a good thing, but only if productivity is sustained."

The flexible labour market, Fraser believes, is "here to stay" and is unlikely to be dismantled, even by a future Labour government. The challenge now is to adapt to it, by improving ways in which underemployed people can use the unwanted time on their hands to gain new skills. This improved in-work training, which would also tackle Scotland's indifferent productivity levels, can either be delivered by employers – many already do this – or in places of further education, which are not currently well-placed to accommodate underemployed workers, and are seeing places being squeezed.

What realistically can the Scottish or UK governments do – especially when times are tough – to discourage underemployment and ensure it does not become accepted as a norm? Ken Mackintosh MSP, Labour's finance and economy spokesman, shares the widespread anxiety that "people are agreeing to work fewer hours just to keep their jobs", and fears that "when employees are so vulnerable it becomes an employers' market, and there are dodgy employers who will spring up in every sector."

Mackintosh believes the Scottish Government could do more to help by bearing down on zero-hours practices in the public sector, and addressing some of the obstacles to earning, such as lack of childcare.

"Too many public-sector bodies are using zero-hours contracts in the social-care sector for example. Local authorities are hiring people during term time and laying them off in the summer; also teachers' contracts are terminated just before they are entitled to full employment rights."

Robin Parker, president of the National Union of Students (NUS) Scotland, urges the Scottish Government to "support a post-graduate apprenticeship scheme by funding increased provision of part-time postgraduate opportunities".

The best, and perhaps only, cure for the ills of underemployment is a demand-led economic recovery, although the EET's concern that this might not eradicate all the negative aspects seems well founded. The committee's recommendations are not especially convincing: the tweaking of labour market "targets" to encompass underemployment; commissioning new research by Skills Development Scotland and others on increasing access to education, training and work experience; and pressuring employers to increase workplace learning. Nevertheless, if an increased awareness of the problem prevents underemployment from becoming accepted as a new fact of Scottish life, last week's report will have done a great service.