With the development of China's economy, the average salary of employees on duty has shown a trend of increasing year by year, which has driven the growth of the upper and lower limits of the social insurance payment base and reflected the past achievements and future direction of the local macroeconomy. Using inter provincial panel data from 2006 to 2022 in China, economic geographic distance is used as the spatial weight matrix, and the maximum likelihood method considering individual and time fixed effects is adopted to estimate the local and spatial effects of raising the lower limit of social insurance payment base on the upgrading and coordination of industrial structure. Research has found that: (1) there is a significant positive correlation between the upgrading and coordination of industrial structure; (2) The magnitude and speed of the increase in the lower limit of the social insurance payment base have a positive spillover effect on the upgrading of industrial structure, while the burden of the increase in the lower limit of the social insurance payment base has a negative spillover effect on the coordination of industrial structure. However, in other regions, the speed and burden of the increase in the lower limit of the social insurance payment base hinder the upgrading of local industrial structure through the "siphon effect"; (3) The increase in the ratio of capital to labor input and the increase in labor mobility will both enhance the lower limit of social insurance payment base in surrounding areas and accelerate the process of industrial structure upgrading, but have not had a significant impact on the coordination of industrial structure. To this end, policies should be implemented to promote the coupling of the lower limit of social insurance payment base with factor input adjustment and labor mobility rate, actively leverage spatial spillover effects, improve regional factor allocation efficiency and develop new quality productivity, and promote the upgrading of industrial structure.