The Scottish Government should “shine a clear spotlight” on large retail companies who refuse to pay staff the real living wage, a think tank has urged.

The Institute for Public Policy Research Scotland (IPPR) called on the Scottish Government to set a clear expectation that all workers should be paid at least the real living wage – adding retail workers who are paid less are being “hung out to dry”.

In a research report released on Thursday, titled State of the Fair Work Nation, IPPR Scotland also says large retail companies who refuse to do so should be held accountable.

£10.90 per hour is currently accepted as the real living wage as the cost of living rises.

Employment law is reserved to the UK Government, but IPPR researchers say the Scottish Government should do more to stand up for living standards in Scotland.

The IPPR’s latest report says more than two thirds of children living in poverty live in a working household and adds that while the Scottish Government is using the social security system to do “much of the heavy lifting” to tackle this, retail employers must play their part too.

In a large sample of retail workers analysed by IPPR, the think tank found 12,000 people are employed by companies who pay the real living wage, while 98,000 are paid below the threshold.

The IPPR also warned that in Scotland, in its current state of growth, it may take another 75 years before all retail workers receive the real living wage.

They said the Scottish Government could use its tax powers to encourage employers to pay staff fairer wages.

Dave Hawkey, senior research fellow at IPPR Scotland and co-author of the report, said: “The real living wage isn’t a luxury – it’s essential for families to meet the basic, decent standard of living yet Scotland’s lowest-paid retail workers are being hung out to dry by large companies who must now take responsibility for their role in in-work poverty in Scotland.

“Scotland can become a fair work nation in the next few years, but everyone must play their part, including the Scottish government, by stepping up the pressure on exploitative employers in sectors like retail, to ensure that everyone in Scotland is paid a fair, liveable wage for the work that they do”.

A Scottish Government spokesperson said: “The Scottish Government urges all employers to sign up to the fair work agenda, including paying the real living wage.

“Employment law is reserved to the UK Government. However, Scotland is leading the way, as 91% of employees aged over 18 earned the real living wage or more in 2022 – higher than any other UK country.

“That has come about through hard work and consistent advocacy from Scottish ministers and our partners like Living Wage Scotland.

“Today the Fair Work Oversight Group – made up of leading figures from business, trade unions, equality groups and academia – will meet for the first time to advise the Scottish Government on its fair work policies.”