The yearly increase of the minimum wage standard leads to the constant rise of labor cost, and its impact on the total factor productivity of Chinese enterprises is controversial. This paper matches the minimum wage standard data of 405 prefecture-level cities in China from 2012 to 2019 with the data of listed companies in China, and discusses its internal influencing mechanism from the perspectives of factor substitution and technology substitution effect. The findings are as follows: the increase of minimum wage will reduce the total factor productivity of enterprises. The squeezing effect of minimum wage on total factor productivity of enterprises shows that the squeezing effect of state-owned enterprises and enterprises with higher degree of financing constraint is stronger, and the squeezing effect of central regions is stronger than that of eastern regions. The higher the minimum wage standard, the more inclined enterprises are to change production efficiency through factor substitution and technology substitution. This study has important reference significance for improving total factor productivity and realizing high-quality economic development.