You'd be surprised. A pay raise only motivates for a couple of weeks. Maybe months if it was a significant jump, but money doesn't convince someone to work hard.

What money can do is attract the talent that will natrually work hard or efficiently. Perhaps overwork in some cases, but the employer wants the most/best work for their dollar just like the employee should want the best dollar for their time/effort (past like knowledge/experience or present).

The sad reality is that most individuals overvalue their skills and most employers undervalue their employees. It is possible and common for two people to be in the same position but one to be 2x or 3x as effective. Money doesn't make the ineffective one more effective, and it takes a LOT of money to convince skilled workers to leave their comfort zones.

This is what employers mean when they say they can't find good talent. They can't find the top-end employers willing to jump ship for minor raises, so they're looking for unicorns. People who don't know their value or skilled/effective people temporarily out of a job (ie: company folds).

This is also what many employees mean when they say they want a living wage. They either don't have the skills they think they do, or they work for one of the companies who poached them up cheap and aren't willing to take the risk to leave their comfort zones for a better paying job.

TL;DR: like many things, it's a more complex question than you'd think.