A boost in employee morale
Wages are no longer the core driving factor behind whether a person takes a job or not, but in the case of minimum wage workers, they would be more inclined to work at a company that offers them a liveable wage. The aim of the minimum wage and the national living wage is to give employees a fair pay, giving them more disposable income to pump back into the economy. The general idea that the more money a person earns the more satisfied they will be still rings true.
When employees know they are getting paid a fair wage, they are generally happier. This means higher morale in the workplace. There have been a number of studies conducted which back this up, most notably in the USA where larger chains such as McDonald’s and Pi Pizzeria introduced their own minimum wage. The end result was a better employee mood and a boost in morale, both of which had a positive impact on customer perception and loyalty. When customers get a better service from employees, they tend to tell other people about their experience and come back time and again, therefore potentially having a positive impact on business turnover.
Whilst much of the data is from the USA, this translates across the pond, too. The efficiency wage theory isn’t endemic to one country – it’s a universal theory that supports the notion of higher wages being linked to higher morale.