Understanding the minimum wage in the United States: federal structure, state variations, and what to expect in 2025

Many Brazilians who dream of working or moving to the United States face a disconcerting reality when researching compensation: the minimum wage in the United States is not a single fixed amount. Unlike Brazil, where there is a national minimum set by the federal government, the American system operates in a decentralized manner, allowing each state — and even cities — to establish their own rules. The result is an impressive disparity ranging from US$ 5.15 to US$ 17.50 per hour, depending on where you work.

The structure of the minimum wage in the United States in 2025

The federal minimum remains at US$ 7.25 per hour, a value frozen since 2009. This is the minimum legal base that no employer can pay below — in theory. In practice, however, most states have exceeded this amount for years. California, Washington, New York, and the District of Columbia lead with minimum wages ranging between US$ 16 and US$ 17.50 per hour.

The reason for this divergence lies in state and municipal autonomy. Major urban centers face exponentially higher living costs, which forces legislators to set minimum wages compatible with local realities. While a person can live relatively comfortably in some Midwestern states, the same salary is insufficient in metropolises like New York or Los Angeles.

How hourly wages work and the monthly calculation

In the United States, the entire salary system revolves around hourly pay. Unlike many countries, there is no concept of a “fixed monthly salary” in the economy. Calculations are simple and straightforward:

To obtain weekly income, multiply the hourly rate by the hours worked in a week. A standard workweek corresponds to 40 hours. Therefore:

7.25 × 40 = US$ 290 per week

Expanding to the (considering 4 weeks) month:

7.25 × 40 × 4 = US$ 1,160 per month

This calculation applies to the federal minimum. In states with higher values, the number increases proportionally. In the District of Columbia, for example, the calculation would be:

17.50 × 40 × 4 = US$ 2,800 per month

The US$ 1,640 difference per month between the federal minimum and the maximum in Washington D.C. clearly illustrates how geographic location directly impacts a worker’s income.

Who earns the minimum wage in the United States?

The minimum wage applies to workers who meet specific criteria. Professionals under 14 years old generally cannot be employed formally. Those between 14 and 18 years old have additional protections regarding working hours and job types. Apprentices and interns often receive reduced amounts or may be exempt under certain conditions.

A special category is workers who receive tips. Waiters, baristas, and similar roles can have a significantly lower base salary — in some states as low as US$ 2.13 per hour — because tips supplement the compensation. This practice is legal in many American states, although controversial.

The most common occupations among minimum wage earners include retail clerks, cashiers, cleaning aides, fast-food employees, stockers, and other entry-level operational roles. These professionals form the backbone of the American labor market, especially in the service sector.

Variations by state: the complete map of the minimum wage in the United States

The United States presents a mosaic of minimum values. States like Georgia and Wyoming officially allow a minimum of US$ 5.15 per hour, but in practice, the federal rate of US$ 7.25 usually prevails to avoid legal conflicts.

The highest minimum wages in the country:

Washington D.C. leads with US$ 17.50 per hour, reflecting its status as the national capital and administrative center. Washington (state) follows with US$ 16.66, driven by the high costs in Seattle and surrounding areas. California adopts US$ 16.50, while New York offers US$ 15.50 in most of the state, with US$ 16.50 in New York (city) and neighboring counties.

Massachusetts, Connecticut, and other northeastern regions also maintain minimum wages between US$ 15 and US$ 16 per hour. Colorado, Minnesota, and other progressive states range between US$ 14 and US$ 15.

The lowest minimum wages (with caveats):

Besides Georgia and Wyoming with their official US$ 5.15, states like Louisiana, Mississippi, and South Carolina adopt the federal minimum of US$ 7.25 as their legal ceiling. In these places, the cost of living partially offsets the lower salary, although the issue remains controversial among economists.

Converting to reais: what is the real purchasing power?

For Brazilians, converting to reais provides important context. With an approximate exchange rate of US$ 1 = R$ 5.20 in 2025:

• Federal minimum per hour: US$ 7.25 ≈ R$ 37.70
• Federal minimum monthly: US$ 1,160 ≈ R$ 6,032
• In Washington D.C.: US$ 2,800 ≈ R$ 14,560

At first glance, the amount in reais seems abundant. An American minimum wage converted to reais significantly exceeds the Brazilian minimum wage of R$ 1,518. However, this superficial analysis omits the more complex reality of relative purchasing power.

Brazil has a single national legal minimum wage, while the US operates a hybrid system. In the United States, the purchase of goods and services consumes a much larger proportion of income. A one-bedroom apartment rent in a modest neighborhood in major American cities easily exceeds US$ 1,500, consuming more than 50% of the federal minimum wage.

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

The straightforward answer is: no, in most realistic scenarios.

Research on the cost of living in the US indicates that essential expenses (food, transportation, utilities, health insurance) amount to approximately US$ 1,185 per month without including rent. With a federal minimum of only US$ 1,160, the balance is negative even before paying for housing.

In states with higher minimum wages, the situation improves marginally. In California or Washington, a worker earns between US$ 2,600 and US$ 2,664 per month (working 40 hours a week). However, these same states have the most expensive rents in the country, often between US$ 1,800 and US$ 2,500 for a decent property.

The common reality among minimum wage workers is the need for multiple jobs, government assistance (food stamps, Medicaid), cohabitation, or family support. The minimum wage in the United States, therefore, does not represent an independent standard of living but rather a legal floor that leaves many in relative poverty.

Conclusion: research is essential before moving

The minimum wage in the United States proves to be more complex than a simple figure. The system’s decentralization offers opportunities in regions with high minimums but also exposes significant regional disparities. For Brazilians considering migration, research should not be limited to the desired state’s minimum wage but should include a thorough analysis of local living costs, the availability of multiple income sources, and professional growth opportunities. Only with this complete picture can an informed decision be made about working or settling in the United States.