YOUNG Scots and women workers face a generation of blighted job prospects, according to a hard-hitting report examining the scourge of underemployment, over-qualification and changing practices in the workplace.

Although MSPs hope some of this will ease as the economy recovers, the fear is a legacy of low-paid, insecure jobs as a result of too many people being unable to secure full-time work making use of their skills and qualifications.

The term underemployment refers to people working fewer hours than they want to, or taking on jobs which do not use all their skills.

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It was the focus of a Holyrood inquiry which warned the problem had grown significantly since the onset of the economic crisis five years ago, which hit young people particularly hard.

The Economy, Energy and Tourism Committee of the Scottish Parliament fears workplace practices introduced during the recession, such as zero-hours contracts which give no guarantees of work to employees, could persist long after the recession is over.

Committee convener Murdo Fraser said: "This inquiry has found the focus on headline unemployment or employment levels only provides one side of the story.

"Underemployment can have a similarly devastating impact on income and on the ability to secure long-term employment."

The Conservative MSP added: "While underemployment may decline when demand returns to the economy, we need action now to prevent negative labour market trends becoming embedded in Scotland."

The committee took evidence from a number of sources on the issue and analysed the difference between unemployment and underemployment, links to other unemployment trends, and the issue of so-called labour hoarding where employers seek to hang on to skilled staff in bad times.

The inquiry found young people were worst affected by underemployment, which was worst in the retail, social care and tourism sectors. "Not only does underemployment inhibit young people's capacity to be independent, but it has a long-term effect on employment prospects," stated the report.

The MSPs also found "a distinct gender profile," with women more affected (11.3% to 8.7%) because of the sectors involved and "caring responsibilities in relation to children and gender stereotyping".

The young are also bearing the brunt of the trend. "In percentage terms, young men aged 16-24 constitute 32% of the total number of male underemployed workers and young women aged 16-24 constitute 25.6% of the total number of female underemployed workers," the report claims.

"The committee is particularly concerned by the higher levels of underemployment experienced by young people. The situation has a particular impact on the least-skilled as it becomes harder for them to secure employment of any kind."

The report argues: "The committee is concerned there is a risk some of the trends that have emerged during the economic downturn – such as involuntary part-time work, self-employment where it is a replacement for employment, zero-hours contracts and temporary contracts with recruitment agencies – may become embedded in a way that makes work significantly more insecure, particularly for the young and unskilled."

Strong regional variations are also highlighted, with the level of the problem ranging from 13.6% in Dundee to 5.1% in Aberdeen, broadly relating to the general unemployment levels.

The disabled were also found to suffer more from the phenomenon, prompting deputy convener Dennis Robertson of the SNP to say: "Disabled people may be disproportionately affected by underemployment and we have called for more data to be collected on employment trends for these groups."

Talking of where young people, women and disabled people were finding themselves in the jobs market, Grahame Smith of the STUC said: "You might call it a twilight zone workforce that doesn't feel engaged and is not protected.

"A lot of criticism of young people is not true, but look at how they are treated in their first time at work."

A Scottish Government spokesman said: "The Government is always open to suggestions on what more can be done, within our limited powers, to address the negative impacts of underemployment here and now and will consider the report's recommendations carefully. However, work is already under way in a number of the areas highlighted for action. For example, the Commission for Developing Scotland's Young Workforce, led by Sir Ian Wood, is currently considering how young people can make an effective transition through the education system and be better prepared to succeed in the world of work."