Abstract:  Based on the macro data from 20002012, with the aid of the measurement model that works with excel, eviews and SPSS and also in the light of the grey theory—entropy principle, the article is to investigate the relationship between minimum wages and social economic development by analyzing the weight, nature and sequence of various influence factors. Research results show that the 19 selected factors have similar weight, indicating that they are equally important to the setting of minimum wages. The minimum wage is to secure the basic needs of the laborers. When set within a reasonable range, it can effectively protect the legal rights and interests of laborers, decrease the gap in income distribution and facilitate the sharing of results of innovation. China’s current minimum wage standard is too low, and can be raised steadily. It is suggested that the 19 influence factors should be carefully considered when establishing minimum wages in the future.

Key words:  income distribution, reform of the wage system, minimum wage standard