The US minimum wage system in 2025: A comprehensive regional analysis and feasibility

Understanding how the minimum wage works in the USA is essential for any Brazilian considering moving to the United States. Unlike Brazil, which adopts a single national value, the American country operates with a decentralized model where the federal minimum wage coexists with state and municipal regulations — creating significant disparities between regions.

The federal structure: a minimum that doesn’t keep up with reality

Since 2009, the US federal minimum wage remains frozen at US$ 7.25 per hour. Although it is the legal minimum across the country, this amount is considered insufficient by most economists. In practice, this translates to approximately US$ 1,160 monthly (considering a standard 40-hour workweek), which represents only R$ 6,032 at the current exchange rate (approximately R$ 5.20 per dollar).

However, economic realities have led several states to establish rates well above the federal level.

The extremes: from the lowest to the highest minimum wages

While states like Georgia and Wyoming maintain rates of only US$ 5.15 per hour (prevailing federal in most cases), regions with higher economic dynamism have adopted very different policies:

District of Columbia leads with the highest minimum: US$ 17.50/hour, resulting in a monthly salary of US$ 2,800 — approximately R$ 14,560.

California set at US$ 16.50/hour, one of the most competitive in the country, in addition to implementing overtime rules: 50% additional after 8 hours daily and 100% after 12 hours.

Washington offers US$ 16.66/hour, reflecting the high cost of living in cities like Seattle.

New York differentiates between the interior of the state (US$ 15.50/h) and New York City (US$ 16.50/h), where access to opportunities justifies higher rates.

Who earns the US minimum wage and in which professions?

The minimum applies to workers aged 14 and older who are regularly employed, except apprentices and interns. The most affected professions include restaurant attendants, cashiers, stock clerks, cleaning assistants, and retail workers.

An important note: professionals who receive tips (like waiters) can earn a lower base, compensated by the amounts left by customers — an exclusively American system that confuses many immigrants.

Converting to the Brazilian reality

Direct comparison can be misleading. The US minimum wage of US$ 7.25/hour (R$ 37.70) seems attractive when converted — generating approximately R$ 1,508 weekly or R$ 6,032 monthly at the federal calculation.

In regions with higher minimums, such as Washington DC with its US$ 2,800 monthly (R$ 14,560), the visual difference is even more pronounced compared to the Brazilian minimum wage of R$ 1,518.

However, this analysis does not consider purchasing power parity. One dollar in the US buys fewer goods and services than its equivalent in reais in Brazil. Additionally, the American cost of living is drastically higher.

Practical viability: is it possible to live on the US minimum wage?

The straightforward answer is: no, in most cases.

Basic monthly expenses in the US amount to around US$ 1,185 (food, transportation, utilities, excluding housing). The national average rent is US$ 1,626 per month, totaling approximately US$ 2,811.

With a federal minimum wage of only US$ 1,160, the deficit is evident. Even in states like California, where the minimum is US$ 16.50/hour (US$ 2,640 monthly), rents in major cities often exceed US$ 2,000, leaving narrow margins.

Hybrid model vs. single minimum: why did the US choose this fragmentation?

Brazil adopts a single national minimum wage, set annually by the federal government — a centralized approach. The US, with its federalist structure, allows each state to adapt its regulations to the local cost of living.

This decentralization has generated two effects: wealthier states anticipate increases to attract labor, while less developed regions resist hikes they consider harmful to the local economy.

Comparative overview: US vs. Brazil in perspective

Although the dollar amount in the US appears higher, the analysis should incorporate economic context:

• In Brazil, R$ 1,518 is the national minimum, but it faces criticism for being insufficient in capitals like São Paulo and Rio de Janeiro.
• In the US, US$ 7.25/hour is widely recognized as inadequate, leading practically every large city to establish significantly higher state or municipal minimums.
• The regional disparity in the US (ranging from US$ 5.15 to US$ 17.50) is much greater than the Brazilian variation, which follows the single federal minimum.

The future of the US minimum wage

The federal minimum wage has been frozen for 15 years, fueling ongoing debates about adjustments. Meanwhile, states continue approving increases to keep pace with inflation and local cost of living pressures.

For Brazilians considering moving to the US, the clear recommendation is: research not only the minimum wage of the destination state but also the specific cost of living in the city, local rent, and opportunities for additional earnings — because the minimum wage is rarely enough to support a person alone.