Minimum wage in the USA in 2025: decentralized system, varying values, and a chasm with Brazil

When it comes to minimum compensation, Brazilians planning to move to the United States often fall into a trap: superficial number comparison. The US minimum wage seems simple at first glance, but it is a radically different system from the Brazilian — fragmented, decentralized, and highly dependent on where you work.

While Brazil maintains a single national floor set by the federal government, the US minimum wage functions like a chessboard, where each state, county, and even city sets its own rules. The federal floor is US$ 7.25 per hour (frozen since 2009), but 29 states have already surpassed this amount. In practice, a worker can earn from US$ 5.15 to US$ 17.50 per hour — a disparity that reflects not only the local economy but also political decisions on labor protection.

How the US minimum wage really works

The American system rejects the idea of a single floor. The federal government established US$ 7.25/h as the absolute minimum, but states have full freedom to be more generous. This arrangement creates layers: the federal acts as a “safety net” preventing drastic drops, while competitive markets and local living costs push wages upward.

Cities like New York, Los Angeles, San Francisco, and Washington DC recognize that US$ 7.25/h is unsustainable in their territories. New York offers US$ 15.50/h at the state level and up to US$ 16.50/h in expensive metropolitan areas. Washington DC, the federal capital, leads with US$ 17.50/h — the highest floor in the country. California, another high-cost state, set at US$ 16.50/h.

On the other hand, rural states with less heated economies still operate close to the federal level. Georgia and Wyoming legally allow US$ 5.15/h for certain employers, although in practice the federal value of US$ 7.25/h generally prevails.

How much do you earn per month with the US minimum wage?

Since compensation is calculated hourly, we need to do the math. Taking the federal (US$ 7.25/h) and a standard 40-hour workweek:

7.25 × 40 hours × 4 weeks = US$ 1,160 monthly

This is what a worker receives with the federal floor, working full-time. But compare with Washington DC (US$ 17.50/h):

17.50 × 40 × 4 = US$ 2,800 monthly

A difference of over US$ 1,600 per month — and both are just following local law.

Converting to reais: the illusion of magnitude

Using the 2025 exchange rate (approximately R$ 5.20 per dollar), the US federal minimum wage in reais would be:

• Hourly: US$ 7.25 ≈ R$ 37.70
• Weekly (40h): US$ 290 ≈ R$ 1,508
• Monthly: US$ 1,160 ≈ R$ 6,032

In Washington DC:

• Monthly: US$ 2,800 ≈ R$ 14,560

At first glance, it seems astronomical compared to the Brazilian minimum wage of R$ 1,518. But this number is deeply misleading.

The real dilemma: purchasing power vs. exchange rate

Direct conversion never tells the full story. A US$ 1,160 salary in the US — although it amounts to R$ 6,032 in gross numbers — does not offer the same standard of living as R$ 6,032 would in Brazil. Why? Because the US has a radically different cost structure.

###Average expenses in the US:

• Apartment rent for a 1-bedroom in an urban area(: US$ 1,626/month
• Basic cost of living )excluding housing(: US$ 1,185/month
• Total approximate: US$ 2,811/month

With a federal minimum wage of only US$ 1,160, the numbers don’t add up. You are US$ 1,651 in the red each month — it is mathematically impossible to live with dignity working at the US federal minimum.

In states with higher minimums, the situation improves, but rents also skyrocket. California and New York, paying US$ 16 to 16.50/h, have the most expensive properties in the country. Washington DC, although offering the highest salary )US$ 17.50/h(, has an average rent of over US$ 1,850 for a one-bedroom.

Real comparison: Brazil vs. US

Both countries face the same problem: the minimum wage is insufficient.

Brazil maintains a centralized system where the same person earns the same minimum in Salvador or São Paulo )although the cost of living varies greatly(. The US allows each region to self-organize, creating much larger regional disparities, but also enabling hot markets to offer higher floors.

Who actually earns minimum wage in the US?

The floor applies to workers:

• Aged 14 and over
• In regular employment )not apprentices or interns(
• In roles that do not primarily depend on tips

Most common professions: supermarket cashiers, fast-food attendants, stockers, cleaning assistants, POS operators. An important exception: waiters and baristas can earn much less )some states allow US$ 2.13/h( because tips are theoretically supposed to supplement income. In practice, this creates severe financial insecurity.

Can you live on the US minimum wage?

The straightforward answer is almost always: no.

With the federal floor of US$ 1,160, working 40 hours a week, you cover only 41% of basic monthly expenses. Even in states with higher minimums, the margin remains tight. Many Americans need to work multiple jobs or rely on social assistance programs )food stamps, housing assistance( to survive.

This explains why the debate over raising the minimum wage is so heated in the US — it’s not an academic issue, but a matter of the economic survival of millions.

The decentralized US minimum wage system

Fragmentation is the defining trait. While Brazil can implement a nationwide increase through a centralized decision, in the US this is impossible. Each state )and many large cities( decides independently, creating:

Advantages:

• Local adaptation to cost of living
• Competition between markets )attracting talent with better wages(
• Flexibility for quick adjustments

Disadvantages:

• Severe regional inequality
• Workers in poorer states earn less
• Incentive for internal migration to wealthier states
• Confusion and lack of transparency for those moving between states

For Brazilians considering moving to the US, the first rule is not to think of “US minimum wage” as a single number. Research the specific state, city, and local cost of living — because US$ 17.50/h in Washington DC can be as insufficient as US$ 7.25/h in a rural area, depending on where you live.

The US minimum wage is not a solved problem — it is a system in constant tension between the need for labor protection and regional economic realities.