Understand the Minimum Wage System in the United States in 2025

Many Brazilians have questions about how compensation works in the United States, especially when it comes to minimum wage. Unlike Brazil, which adopts a single national value, the American system is decentralized: each state, county, and even city can set its own minimum wage. This results in significant variation — workers can earn from US$ 7.25 up to US$ 17.50 per hour, depending on the location.

The Federal Minimum and State Variations

The federal minimum wage in the United States is US$ 7.25 per hour, a rate frozen since 2009. However, this is only the national floor — most states have adopted higher values. States with high living costs, such as California, Washington, and the District of Columbia, have their own minimum wages that exceed twice the federal minimum.

The logic behind this decentralization is simple: each region has its own cost of living. A large city like New York or Los Angeles cannot pay the same as a rural area. Therefore, the United States leaves this decision to states and municipalities.

How Much Does an American Worker Earn at Minimum Wage?

In the US, compensation is calculated per hour, and the monthly salary varies according to the working hours. Considering the standard 40-hour workweek:

Basic calculation:

• Hourly wage × 40 hours × 4 weeks = monthly salary

Using the federal minimum (US$ 7.25/h):

• 7.25 × 40 × 4 = US$ 1,160 per month

This is the reality for those working at the federal minimum wage. But in regions with higher minimums, the monthly amount increases substantially. In the District of Columbia, for example, with US$ 17.50 per hour:

• 17.50 × 40 × 4 = US$ 2,800 per month

The Highest Minimum Wages by State

Some states in the US stand out with the highest minimum wages:

District of Columbia — US$ 17.50/h (the highest in the country)

Washington — US$ 16.66/h

California — US$ 16.50/h (with special rules for overtime)

New York — US$ 15.50/h in the state, reaching US$ 16.50/h in areas like Manhattan

Massachusetts — US$ 15/h

Maryland — US$ 15.32/h

On the other hand, states like Georgia and Wyoming officially adopt US$ 5.15/h, but in practice, the federal minimum of US$ 7.25 prevails.

Who Receives Minimum Wage?

The minimum wage in the United States applies to:

• Workers aged 14 and older
• Employees hired for regular hours
• Professionals who are not apprentices or interns
• People who do not primarily depend on tips

The most affected sectors include retail, food service, cleaning, and customer service. An important peculiarity: waiters and attendants who receive tips can earn a lower base salary, as tips supplement their income.

Conversion to Real: What is the Actual Value?

To contextualize, considering the approximate exchange rate of US$ 1 = R$ 5.20 in 2025:

Federal minimum wage:

• Per hour: US$ 7.25 ≈ R$ 37.70
• Per month: US$ 1,160 ≈ R$ 6,032

In Washington D.C.:

• Per month: US$ 2,800 ≈ R$ 14,560

Comparison: Minimum Wage in the US vs. Brazil

Comparing the two countries requires more than a simple currency conversion. In 2025, the US federal minimum results in US$ 1,160 monthly, while in Brazil, the minimum wage is R$ 1,518.

Directly converting (US$ 1 = R$ 5.20), the American value in reais (R$ 6,032) appears significantly higher. However, the real analysis involves purchasing power in each country.

In the US, a minimum wage of US$ 1,160 is insufficient to cover basic expenses in most states, especially in large metropolises. In Brazil, R$ 1,518 faces the same challenge — it is the legal minimum, but does not adequately support a single person in many capitals.

Experts use Purchasing Power Parity (PPC) for more accurate comparisons. According to this metric, one dollar in the US buys fewer goods and services than the equivalent in reais in Brazil. The absolute 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 straightforward answer is: in most cases, no.

Even working 40 hours a week, the federal minimum wage in the US does not cover basic expenses:

• Cost of living (excluding rent): US$ 1,185/month
• Average rent: US$ 1,626/month
• Total: US$ 2,811/month

With a federal minimum of only US$ 1,160, the deficit is clear.

States with higher minimums, like California or the District of Columbia, offer higher wages — but their rents are among the highest in the country. There is no easy balance.

Conclusion: A Complex and Decentralized System

The minimum wage in the United States is a multifaceted issue. While the federal minimum has remained frozen for decades, states and cities continue to approve increases to keep up with inflation and local realities. For Brazilians considering moving or working in the US, researching not only the state salary but also the specific cost of living in the region is essential.