How does the minimum wage work in the USA? Understand the decentralized structure and the state-by-state values in 2025

Many Brazilians who dream of working or studying in the United States come with a fundamental question: what is the minimum wage in the USA? The answer is more complex than it seems. Unlike Brazil, which adopts a single national minimum wage, the American system operates in a fragmented way — and this decentralization deeply affects how much a worker actually earns.

Why does the minimum wage in the USA vary so much from state to state?

The American structure is unique. While the federal government set a minimum of US$ 7.25 per hour in 2009 (and it has remained frozen for 16 years), each state, county, and even municipality has the right to establish its own minimum. In practice, this means the country functions with multiple minimum wages simultaneously.

The result? A worker can earn from the federal minimum of US$ 7.25/h up to US$ 17.50/h in Washington D.C., depending solely on where they work. This discrepancy directly reflects on the quality of life and the viability of living on the minimum wage in different regions.

What is the minimum wage in the USA in 2025: federal and state values

The federal minimum remains at US$ 7.25/hour, but more progressive states have already surpassed this mark significantly. In 2025, the values vary considerably:

States with the highest minimum wages:

• District of Columbia (Washington D.C.): US$ 17.50/h — the highest in the country
• Washington: US$ 16.66/h
• California: US$ 16.50/h
• New York: US$ 15.50/h (up to US$ 16.50/h in the city)
• Massachusetts: US$ 15.00/h
• Maryland: US$ 15.00/h

States with the lowest minimum wages:

• Georgia: US$ 5.15/h (although the federal US$ 7.25 prevails in most cases)
• Wyoming: US$ 5.15/h
• Louisiana: US$ 7.25/h
• Mississippi: US$ 7.25/h

Special rules and overtime

In California, for example, there is an additional structure for overtime:

• Up to 8h/day: regular salary
• From 8h to 12h/day: 1.5x the hourly rate
• Above 12h/day: 2x the hourly rate

This makes the potential earnings significantly higher for those working beyond the standard shift.

How much does a worker earn per month in the USA?

Since the American system is based on hours worked, the monthly calculation depends on weekly working hours. Considering a standard 40-hour workweek:

Calculation of the minimum monthly salary in the USA:

Hourly wage × 40 hours × 4 weeks = Monthly salary

With the federal minimum (US$ 7.25/h): 7.25 × 40 × 4 = US$ 1,160/month

With Washington D.C. (US$ 17.50/h): 17.50 × 40 × 4 = US$ 2,800/month

With California (US$ 16.50/h): 16.50 × 40 × 4 = US$ 2,640/month

The difference is striking: a worker in D.C. earns more than double the federal minimum wage, highlighting how geographic location determines actual income.

What is the minimum wage in the USA converted to reais?

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

American federal minimum:

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

Washington D.C.:

• Monthly: US$ 2,800 ≈ R$ 14,560

At first glance, these numbers impress Brazilians. The American federal minimum wage converted (R$ 6,032) seems significantly higher than the Brazilian minimum wage of R$ 1,518. However, this simplistic comparison is misleading.

Minimum wage in the USA versus Brazil: which one actually buys more?

The issue is not just converted numbers — it’s real purchasing power. While Brazil adopts a single national minimum wage, the USA allows each state to set its own minimum. This structural difference creates completely different scenarios:

Brazilian reality:

• Single minimum wage: R$ 1,518
• Applicable nationwide
• Challenging to support a person in major capitals

American reality:

• Federal minimum: US$ 7.25/h (R$ 37.70/h)
• State minimums range from US$ 5.15 to US$ 17.50/h
• Cost of living varies drastically by region

Using purchasing power parity (PPP) metrics (PPC), one dollar in the USA generally buys less than the equivalent in reais converted in Brazil. This is because the American cost of living is significantly higher.

Who earns the minimum wage in the USA?

The minimum wage applies to workers:

• Aged 14 and above
• Employed for regular or part-time shifts
• Who are not officially registered apprentices or interns
• Who do not primarily depend on tips

Professions that often earn this minimum wage:

• Restaurant and fast-food attendants
• Cashiers in retail stores
• Stockers and re-stocking staff
• Cleaning assistants
• Supermarket employees
• Entry-level operational roles

Important exception: Workers who receive tips (like waiters) can earn a significantly lower base salary, as tips are supposed to supplement income. Some states allow wages as low as US$ 2.13/h for these roles.

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

The pragmatic answer is: in most cases, no. Even working 40 hours a week continuously, the federal minimum wage does not cover basic expenses:

Approximate average costs in the USA:

• Living expenses (excluding rent): US$ 1,185/month
• Average rent: US$ 1,626/month
• Total minimum: ~US$ 2,811/month

With a federal minimum wage of US$ 1,160/month, there is a clear deficit. The budget simply doesn’t add up.

States with higher minimum wages offer some relief, but with caveats:

California, New York, and Washington D.C. offer much higher minimums, but also have the most expensive rents in the nation. Someone earning US$ 2,640/month in San Francisco or US$ 2,800/month in Washington D.C. faces equally high living costs, resulting in purchasing power not proportional to the wage increase.

Why has the federal minimum wage remained frozen for 16 years?

Since 2009, the federal rate has not been adjusted. Meanwhile, progressive states have adjusted their minimums multiple times to keep up with inflation and the cost of living. This dynamic has created a reality where the federal minimum is practically irrelevant in dynamic economies — it functions only as a theoretical floor in a few less developed states.

Conclusion: what to know before working in the USA

For Brazilians considering work or relocation to the United States, researching the minimum wage in the specific region is essential — but equally important is analyzing the local cost of living. A nominally high salary can be insufficient in an expensive metropolis, while a modest minimum in a rural state might be enough.

American decentralization offers opportunity: you are not bound to the federal minimum, but to a regional ecosystem of wages and costs. Research the state and city, check current values, and project your realistic expenses before making any decision.

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