## The Minimum Wage in the United States in 2025: Decentralized System and Regional Disparities

Understanding how the minimum wage works in the United States is essential for those planning to move, work, or study there. The reality is that the American system operates very differently from the Brazilian model. While here we have a single nationally determined value, in the US multiple minimum wages coexist: the federal minimum of US$ 7.25 per hour alongside state and local legislation that can set much higher levels.

This fragmentation results in extreme scenarios. A worker can earn from US$ 5.15 per hour in certain states up to US$ 17.50 in the District of Columbia — a variation that reflects the huge differences in cost of living across American regions.

## The Structure of the Minimum Wage in the US: Wage Federalism

The US minimum wage system operates on three levels: federal, state, and local. The federal minimum remains frozen at US$ 7.25 since 2009 — a fact that often causes controversy among economists and policymakers. However, this amount is only a floor, not a ceiling.

States like California, Washington, New York, and the District of Columbia have surpassed this mark years ago. Cities with high living costs — such as San Francisco, Los Angeles, Seattle, and Manhattan — have set their own limits, generally ranging between US$ 15 and US$ 17.50 per hour.

Federal autonomy creates a fragmented labor market. A cashier in Wyoming faces economic realities completely different from those of a professional in the same role in Washington D.C.

## Conversion and Purchasing Power: Beyond Exchange Rate Mathematics

Converting the US minimum wage to Brazilian reais requires caution. Using the approximate 2025 rate (US$ 1 = R$ 5.20):

- **US federal minimum:** US$ 7.25/h ≈ R$ 37.70/h
- **Weekly income (40 hours):** US$ 290 ≈ R$ 1,508
- **Standard monthly income:** US$ 1,160 ≈ R$ 6,032

In Washington D.C., the scenario changes significantly:
- **Monthly minimum:** US$ 2,800 ≈ R$ 14,560

At first glance, the amount in reais is impressive. However, this superficial comparison masks the real dynamic: purchasing power. One US dollar buys fewer goods and services than its converted equivalent in Brazilian purchasing power. Living in Manhattan or San Francisco costs proportionally more than living in Rio de Janeiro or São Paulo.

## Who Earns This Minimum and How It Is Calculated

The US minimum wage applies to workers aged 14 and above hired under regular employment, excluding apprentices, interns, and professionals whose main income comes from tips. Cashiers, attendants, stockers, cleaning aides, and entry-level operational roles make up the base of this workforce.

The calculation is straightforward:

**Formula:** Hourly wage × Weekly hours × 4 weeks = Monthly

Example with the federal minimum: 7.25 × 40 × 4 = US$ 1,160/month

States with more progressive legislation quadruple this amount. In California (US$ 16.50/h): 16.50 × 40 × 4 = US$ 2,640/month

## Variation by State: The American Salary Mosaic

Disparities between states reflect divergent economic policies and regional costs. The highest minimum wages are concentrated on the East and West coasts:

- **Washington D.C.:** US$ 17.50/h — the highest
- **Washington:** US$ 16.66/h
- **California:** US$ 16.50/h
- **New York (state):** US$ 15.50/h; specifically NYC: US$ 16.50/h

At the opposite extreme, Wyoming and Georgia set US$ 5.15/h, although the federal minimum of US$ 7.25 generally prevails in practice.

This fragmentation encourages internal migration. Workers seek regions with higher minimums, increasing labor market pressure in major urban centers and intensifying competition for jobs.

## Living Sustainably: The Economic Reality of the Minimum Wage

Mathematically, it’s possible to calculate what remains after basic expenses. Empirically, the answer is simple: insufficient in most cases.

The average American cost of living (excluding housing) is around US$ 1,185 per month. Rents vary drastically: national average of US$ 1,626, but in large metropolises easily exceeding US$ 2,500.

With a federal minimum wage of US$ 1,160, the equation doesn’t add up. Even in states with higher minimums, expensive cities like San Francisco and New York absorb a large part of income just in housing.

Poverty-stricken southern states, paradoxically, have lower minimums and lower living costs — offering a better balance, though still challenging.

## Comparison with Brazil: Different Structural Contexts

Brazil and the US adopt opposite wage philosophies. Brazil maintains a uniform national minimum wage (R$ 1,518 in 2025), set annually by federal decree. The American system, decentralized, allows each state to defend its interests.

Theoretically, the American worker earns much more in dollars. In practice, rent, education, health, and transportation in the US consume significantly larger proportions of income. A technician in São Paulo may enjoy a better quality of life than a fast-food worker in Los Angeles, despite a lower nominal salary.

The Purchasing Power Parity (PPP) metric reveals this dynamic. One dollar in the US does not equal five reais in real purchasing capacity — the difference is less than the exchange rate suggests.

## Perspective for Brazilian Workers

Brazilians considering moving to the US should research beyond the state’s minimum wage. Regional living costs, availability of jobs in their field, access to benefits (health, retirement), and opportunities for professional advancement matter as much as the starting wage.

The US minimum wage reflects a fragmented economy, where geography determines economic destiny even more strongly than in Brazil. Understanding this complexity is essential before making any relocation decision.