The crux of this research is the ramifications of minimum wage adjustments on economic indicators and the ensuing potential outcomes of employing a sector-specific minimum wage in the Republic of Armenia. Utilizing correlation analysis and panel models, the investigation unveils a tangible positive correlation between minimum wage and parameters like average monthly wage, productivity, and employment. If we delve into sectoral nuances, the differences in the ratio of average and minimum wages and labor productivity in different economic sectors become tangible, confirming the proposal to apply a sectoral approach to determining the minimum wage. This approach gives specific sectors with the latitude to stabilize wages based on their individual productivity and wage averages and anticipates inducing labor market dynamism and inter-sector competition. Furthermore, the sectoral minimum wage model grants the government fiscal flexibility by decoupling state employee remuneration from a unified minimum wage, thereby providing a mechanism for independent adjustment of wages in the public sector. Therefore, the endorsement of a sectoral minimum wage system looms as a potent strategy, safeguarding low-productivity sectors while simultaneously incentivizing a holistic elevation in productivity and wages across the economy of the Republic of Armenia.