The Financial Times reports that the prime minister has asked companies to raise salaries of lower-paid employees in order to increase purchasing power and  boost the economy.

As Citizens Advice Scotland’s Chief Executive wrote to the chancellor earlier this month, economists suggest the economic multiplier for income transfers to low income families is higher; they estimate that for every pound GDP increases by £1.60. Families with low income spend the additional money, stimulating the economy by boosting demand and supporting businesses.

For the common good

The first to agree has been thriving retail chain Lawson Inc, whose president decided to “set an example”, for the common good. He has introduced 3% average annual pay rises for about 3,300 full-time employees aged between 20 and 49. These are the ‘working poor’, often living with parents when single, accustomed to living on very tight budgets.”

Seven & I Holdings, a prosperous convenience-store chain, is also to increase base pay for more than 50,000 employees. Some companies in other industries are responding: an operator of fitness clubs has pledged to increase the pay of permanent staff who don’t smoke. A furniture retailer is extending pay-rises to part-time employees.

An informed source tells me that other companies will follow suit.

This is an inspired move by prime minister Shinzo Abe . . .