ABSTRACT
After the new labor law, and the minimum wage system goes on. The influence caused by it is greater than any others in the small and medium sized enterprises in Zhe jiang province. Some of it can not bear it and they are bankruptcy, while others become larger and more powerful. Here, according the correlative theories of model, the paper show that the minimum wage influences the capital flow, especially the economic returns of labor intensive corporations. Based on the statistics of average fixed capital, average authorized capital and average profit analysis, and the two perspectives of industry and one corporation, the paper shows the profit and capital flow of them. At the end, the paper point out the countermeasures in solving the increase of labor costs by the minimum wage.
KEY WORDS：new labor law, minimum wage, small and medium enterprises
