Understand the minimum wage system in the USA in 2025: values, operation, and state disparities

What is the minimum wage in the USA? This is one of the most frequently asked questions among Brazilians who aim to work or move to the United States. Unlike Brazil, which adopts a single minimum wage nationwide, the American system operates in a decentralized and complex manner.

How does the minimum wage work in the United States?

The federal minimum wage has been set at US$ 7.25 per hour since 2009. However, this is only the national minimum — states, counties, and cities have full autonomy to establish their own rates. This characteristic creates a highly heterogeneous landscape, where workers can earn from the federal minimum up to amounts exceeding US$ 17 per hour, depending solely on the geographic location.

Regional disparities are significant. While some jurisdictions maintain values close to the federal minimum, large urban centers like New York, Los Angeles, and Seattle have adopted significantly higher minimum wages to keep up with local inflation and rising living costs.

Distribution of minimum wage by states in 2025

State variations reveal a complex economic geography:

At the higher end:

• District of Columbia (Washington D.C.): US$ 17.50/hour
• Washington: US$ 16.66/hour
• California: US$ 16.50/hour
• New York: US$ 15.50/hour (larger cities reach US$ 16.50/hour)

At the lower end:

• Georgia and Wyoming: US$ 5.15/hour (although the federal minimum of US$ 7.25 prevails in most situations)

This range of approximately US$ 12.35 between the highest and lowest values directly reflects socioeconomic differences between regions, as well as distinct labor welfare policies.

How much does a minimum wage worker earn monthly?

In the USA, calculations are based on hours worked. Considering a standard 40-hour workweek:

Basic calculation (federal minimum wage):

• Weekly: US$ 7.25 × 40 = US$ 290
• Monthly: US$ 7.25 × 40 × 4 = US$ 1,160

Examples in states with higher minimum wages:

• Washington D.C.: US$ 17.50 × 40 × 4 = US$ 2,800/month
• California: US$ 16.50 × 40 × 4 = US$ 2,640/month

It is important to note that professionals receiving tips (such as waiters) may have a lower base salary, as tips are counted as additional income.

Who qualifies for the American minimum wage?

The minimum wage applies to workers who:

• Are 14 years or older
• Are employed under a regular full-time schedule
• Do not perform apprenticeship or internship roles
• Do not depend on tips as their main source of income

The groups most frequently earning this amount include: cashiers, retail and restaurant attendants, cleaning professionals, stockers, and entry-level operational roles.

Conversion to reais: what is the real purchasing power?

Using an approximate exchange rate of US$ 1 = R$ 5.20 in 2025:

Federal minimum wage converted:

• Per hour: US$ 7.25 ≈ R$ 37.70
• Monthly (4 weeks): US$ 1,160 ≈ R$ 6,032

In Washington D.C.:

• Monthly: US$ 2,800 ≈ R$ 14,560

Although the numerical value seems substantial in reais, the analysis should consider the relative purchasing power in each country. One dollar buys fewer goods and services in the US than its equivalent in reais in Brazil.

How does the US minimum wage compare to Brazil?

The US federal minimum wage (US$ 1,160 per month) compared to the Brazilian minimum of R$ 1,518 shows important structural differences:

Model of definition: Brazil adopts a single national minimum; the US uses a hybrid system with federal, state, and municipal minimum wages.

Cost of living: Both nations face similar challenges — the US federal minimum is insufficient to cover basic expenses in most states, just as the Brazilian minimum wage faces limitations in large capitals.

Purchasing power parity: Specialized analyses demonstrate that absolute differences in reais do not translate linearly into proportional quality of life, as cost structures differ significantly between the two countries.

Is it possible to live on the minimum wage in the United States?

The pragmatic answer is: in most contexts, no. Calculating average expenses:

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

With a federal minimum wage of only US$ 1,160, there is a considerable deficit. Even in states with higher minimum wages, like California or D.C., rents increase proportionally, maintaining the difficulty of sustaining oneself.

Therefore, the minimum wage in the US reflects a complex reality: although the nominal value is high, its capacity to support an adequate standard of living remains limited in most American regions. For Brazilians considering relocation, detailed research on state minimum wages, local costs, and income supplementation opportunities are essential before making any decision.