Wage raises may harm society by reducing public goods provision.
A higher wage can actually make people worse off because it can lead to less contribution to public goods. When people earn more money, they tend to focus more on buying things for themselves instead of helping with public goods like community projects. This can result in a decrease in the overall provision of public goods, which can make everyone in the community worse off, even though they have more money to spend on themselves. This finding is important for developing economies, especially when starting with low wages.