Anytime a person can make more money for what they do that is always a good thing. Making money to support your family or pay bills is huge and much needed especially in today's world. Giving someone a strong incentive to work hard can help anyone, and promote a strong work environment.
Workers should be paid more money as motivation, because that is what they are ultimately there for. If they aren't being paid enough money, there isn't incentive to do the job properly anymore and work starts to faulter. Treat workers better and your company is all of the sudden more productive.
More money for workers is a good incentive for them to work harder and try more. I think that extra pay means they will put more effort into because they want to show that they deserve the money and have a right to keep it. They will work as hard as they are paid.
Incentives are powerful motivators in most any context, and this is especially true for workers. In particular, those jobs that are not seen as fulfilling or intellectually challenging must find other means to motivate and encourage production. Rewarding good work with extra money can increase both production and worker morale.
Paying people more money means that there's more money out there. But what will you buy with it? More money does not mean that by some miracle, there are suddenly more goods to be purchased. Hence just handing out more money gets you nowhere: it only makes money less valuable, which is called inflation. It's been there in many countries for long times, and it always means poverty, except for those people who don't own money but real estate, gold and other valuables - things of actual value, not little bits of paper with a little print on them. Money doesn't solve problems.
Give workers food and shelter for their families, and they will be motivated enough.
I believe workers should be paid more money for many reasons, but motivation should not be the main reason. While I believe motivation should be a benefit of decent pay, I do not think it should be an employers only reason for paying an employee a decent rate. Employers should consider the living wage necessary to survive in the community they thrive in and remember that their employees is someone who is part of that community. They should also remember that they are no different in terms of the employee and that the employee inhabits the same world that they do and is just as much a functioning part of it, as they are. I believe low wages say a lot about the leaders of the companies that allow people to live in poverty while they build up their fortunes.