Dundee has the highest level of underemployment in Scotland, according to a Scottish Parliament report.
The document, published today by the economy, energy and tourism committee, said individuals working fewer hours than they want to, or taking on jobs which do not utilise all their skills, are at risk of damaging their earning potential in the long term.
According to the report, underemployment has grown significantly since the economic crisis five years ago, with young people particularly badly affected.
The committee has concluded this can impact upon a person’s career prospects and earning potential in the same way unemployment does.
Particular areas of concern highlighted include the potential for trends such as the use of zero hours contracts, temporary contracts, self-employment as a replacement for employment, and involuntary part-time working becoming permanent.
Committee convener Murdo Fraser said: “This inquiry has found that 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.
“Whilst underemployment may decline when demand returns to the economy, we need action now to prevent negative labour market trends becoming embedded in Scotland.”
The report highlights “a significant variation in underemployment rates across Scotland”, citing the 13.6% in Dundee compared to 5.1% in Aberdeen.
In general, the report says the levels of underemployment correlate with unemployment levels and reflect the lack of demand in the labour market.
Shetland, which also has an underemployment level of 13.6%, has one of the highest levels of employment in Scotland while Dundee has one of the lowest.
Clackmannanshire, Angus, Perth and Kinross and Stirling all have underemployment levels above the national average of 9.9%.
Only Fife holds a lower rate locally, according to the stats taken from the Annual Population Survey between October 2011 and September last year.
Deputy convener Dennis Robertson said: “The committee was particularly concerned about the impact of underemployment on young people and women.
“There was also evidence suggesting that other people with protected characteristics, particularly disabled people, may be disproportionately affected by underemployment and we have called for more data to be collected on employment trends for these groups.”
The economic downturn and its employment legacy are cited as reasons for underemployment. Labour hoarding, where staff have their hours cut so not to be made redundant, is also singled out.
The committee has called on the Scottish Government, Skills Development Scotland and the Scottish Funding Council to consider if opportunities to access education, training and work experience can be improved for those that are underemployed, including graduates.
There was particular concern about the recent reduction in staff training and the committee said the Scottish Government should consider how it can work with partners to promote employer engagement.
It also wants ministers to conduct more research into the reasons behind high childcare costs.