In the process of establishing a labor system adapted to the socialist market economy, the improvement of labor protection systems, represented by the minimum wage system, coupled with factors such as aging population, has led to a rapid increase in labor costs for Chinese enterprises. On the one hand, rising labor costs will encourage enterprises to use capital factors to replace labor factors, leading to an increase in corporate financing demand; on the other hand, rising labor costs will push up the operating leverage of enterprises, increasing the likelihood of them falling into financial difficulties and the difficulty of financing. In this case, whether enterprises will use leverage manipulation to improve their ability to obtain funds is a topic worthy of discussion. Based on the adjustment data of minimum wage standards in various regions of China, this paper selects A-share listed companies in Shanghai and Shenzhen from 2007 to 2020 as the sample to empirically investigate the impact of the increase in minimum wage standards on corporate leverage manipulation and its specific mechanism. The results show that an increase in minimum wage standards significantly exacerbates the degree of leverage manipulation by enterprises, and the mechanism is that the increase in operating leverage brought about by the increase in minimum wage standards leads to the problem of limited debt financing ability of enterprises. Furthermore, this exacerbating effect is more pronounced in enterprises with higher labor dependence, lower labor quality, stronger financing constraints, more dependence on bank financing for financing structure, and weaker cost transfer ability. The leverage manipulation triggered by the increase in minimum wage standards enables enterprises to obtain more credit funds, but it also increases the risk of corporate debt default, and ultimately reduces corporate value. In addition, the government’s tax reduction policy can effectively alleviate the exacerbating effect of the increase in minimum wage standards on corporate leverage manipulation.

From a theoretical point of view, this paper not only expands the research on the incentives for corporate leverage manipulation manipulation from the perspective of labor market factors, but also provides new evidence support for the impact of minimum wage policy implementation on corporate business behavior from the perspective of corporate financing. From a practical point, this paper helps to deepen people’s understanding of the incentives for corporate leverage manipulation and the economic impact of the implementation of the minimum wage system, and also provides an important theoretical basis and policy enlightenment for the government to coordinate the advantages and disadvantages of policies, optimize China’s minimum wage policy tools, avoid the accumulation of short-term risks, and ultimately help to achieve the goal of “common prosperity”.