Understand the Minimum Wage System in the United States in 2025

Who dreams of working in the United States needs to understand a fundamental point: unlike Brazil, which adopts a single national minimum wage, the American system operates in a decentralized manner. The federal minimum wage set at US$ 7.25 per hour since 2009 is only the base — states, counties, and even municipalities have the autonomy to set their own levels, creating a reality where workers earn from US$ 7.25 up to US$ 17.50 per hour depending on the location.

The Reality of the Federal Minimum Wage vs. State Salaries

The federal minimum wage in the United States has remained frozen at US$ 7.25 per hour for 16 years. However, this figure hardly reflects the actual scenario of the American labor market, where most states have already surpassed this amount. Major urban centers like New York, California, Washington, and the District of Columbia have implemented significantly higher minimum wages, generally between US$ 15 and US$ 17.50 per hour.

This regional disparity exists precisely because the cost of living in metropolises is brutal. An expensive city requires proportional salary compensation — otherwise, workers cannot even afford rent.

How the Monthly Salary Calculation Works in the US

Unlike Brazil, where salary is traditionally monthly, the United States operates on an hourly payment basis. The calculation is straightforward:

Monthly Salary = Hourly Rate × 40 hours × 4 weeks

Applying the federal minimum wage of US$ 7.25:

• Weekly income: US$ 290
• Monthly income: US$ 1,160

In Washington D.C., where the minimum wage reaches US$ 17.50 per hour, a full-time worker earns approximately US$ 2,800 per month — more than double.

Who Actually Receives the Minimum Wage?

The minimum wage applies to virtually all workers from age 14, with some important exceptions:

Workers covered by the minimum wage include:

• Food service attendants
• Retail cashiers
• Stock and logistics personnel
• Cleaning and maintenance crews
• Administrative assistants

A critical nuance: professionals who live off tips (such as waiters) can receive a substantially lower base salary, as their compensation is supplemented by tips left by customers. Some states allow even lower minimum wages for this category.

The Regional Map: Extreme Disparities Between States

The United States exhibits a colossal variation in minimum wages across its territories. More progressive states have implemented annual adjustments linked to inflation, while others maintain levels at the federal standard.

Top of the scale:

• District of Columbia: US$ 17.50/h — the highest in the country
• Washington: US$ 16.66/h
• California: US$ 16.50/h with specific rules for overtime (1.5x after 8 hours daily, 2x after 12 hours)
• New York: US$ 15.50/h in the state, US$ 16.50/h in the city and nearby counties

Bottom of the scale:

• Georgia and Wyoming: US$ 5.15/h — although in practice, the federal minimum of US$ 7.25 prevails for most workers

This US$ 12.35 per hour gap between the lowest and highest minimum wages reveals the radical decentralization of the American model.

Brazil vs. United States: Purchasing Power in Perspective

A direct conversion to reais can be misleading. In 2025, the American federal minimum wage of US$ 1,160 per month (converted at an approximate rate of US$ 1 = R$ 5.20) results in about R$ 6,032. The Brazilian minimum wage, adjusted to R$ 1,518, seems insignificant in comparison.

However, this superficial analysis ignores the economic reality: purchasing power is not linear.

Absolute cost of living reveals the truth:

• Basic expenses in the US (excluding rent): US$ 1,185/month
• Average American rent: US$ 1,626/month
• Total minimum monthly cost: US$ 2,811

With a federal minimum wage of only US$ 1,160, the math doesn’t add up — a worker in this situation operates in a permanent deficit. In Brazil, although R$ 1,518 is also insufficient in major capitals, the relative cost of living is proportionally lower in many regions.

Purchasing power parity shows that one dollar in the US buys, on average, fewer goods and services than its equivalent in reais converted in Brazil. The nominal difference in reais does not translate linearly into a higher quality of life.

Is it Possible to Live on Minimum Wage in the US?

The direct answer is no, in most scenarios.

A worker earning the federal minimum of US$ 7.25 per hour, even working 40 hours a week for four weeks, earns US$ 1,160 — a figure that does not cover even 60% of the basic subsistence minimum. States with higher minimum wages, such as California or the District of Columbia, offer higher salaries (often above US$ 2,500 per month), but face the highest housing costs in the country.

This structural contradiction explains why:

• Many Americans work multiple jobs simultaneously
• Families depend on government benefits even with formal employment
• Economic mobility across generations remains limited

For Brazilians considering moving to the United States, researching not only the state minimum wage but also the specific cost of living in the region is absolutely essential. A salary that seems attractive in conversion may prove inadequate after accounting for rent, transportation, food, and healthcare.

Summary: The American Minimum Wage in Context

The United States maintains a hybrid model where the federal minimum wage coexists with state and municipal legislation, creating deep regional disparities. While some localities adequately compensate for inflation and high living costs, others remain with wages that have not kept pace with economic realities for decades.

For those planning to work in the United States, the question is not simply “what is the minimum wage?” — but “what is the minimum wage in the region where I will live, and will it be enough for my needs?”