If it's about pay (no arguments from me the guys deserve it!), I think raising the base pay for each grade is better than diluting the meaning of the ranks for purely financial reasons.
If it's about prestige, a better solution would be (IMNSHO) increasing the number of grades below Corporal. That's the reason the US Army kept Specialist (previously Specialist Four), even when they dumped all the other Specialist grades (they used to have Specialist all the way up to E9 -- Sergeant Major equivalent. . . although I seem to recall no one was ever promoted to Spec 9, maybe not even Spec 8). Specialist provides recognition AND pay to correspond with an experienced private who has fully mastered his job. And the Specialists (especially in Combat Arms units) hold great sway as peer leaders, even without formal NCO designation (i.e., the "Spec-4 Mafia").
The US Army still has Corporals, normally for Specialists slotted into an NCO role (occaisionally, a PFC will be promoted to Corporal directly -- I was, since I was already in a Staff Sergeant billet.) It's just that Corporals aren't very common (practically unheard of outside Infantry units.) But with Specialists, there isn't a need to give a man an NCO title just to give him a pay raise commenserate with his experience and duties.
So Corporal (even though it's the same pay grade as Specialist) provides another level of recognition for a Specialist who isn't quite ready (usually minimum time issues, NCO school, or the promotion list hasn't caught up to them yet) for Sergeant, but IS in a leadership billet. Means Corporals are considered on the fast track.