United States 2025: Demystifying the Minimum Wage and the Real Cost of Living

How much does it really cost to work in the United States? Many Brazilians dream of moving to the country in search of better opportunities, but few truly understand how the minimum wage system works. The answer may surprise you: the American system is completely decentralized.

The reality of the minimum wage in the United States

Unlike Brazil, which has a single national floor, the United States operates with a surprisingly complex hybrid model. The federal government sets a floor of US$ 7.25 per hour — a value frozen since 2009 — but this is just the beginning of the story.

Each state has the freedom to set its own minimum, creating an extremely varied landscape. While Georgia and Wyoming maintain rates of US$ 5.15/h, states like California and New York have already adopted US$ 16.50/h. The record belongs to the District of Columbia, with US$ 17.50 per hour — more than double the federal rate.

This regional disparity means that the salary you receive depends entirely on where you work, not just if you work in the United States.

How is monthly income calculated?

In the US, everything is based on hours. Taking the federal minimum as a reference:

Weekly calculation: US$ 7.25 × 40 hours = US$ 290
Monthly calculation (4 weeks): US$ 7.25 × 40 × 4 = US$ 1,160

Sound low? It is. Professionals earning the federal minimum make only US$ 1,160 per month — cashiers, fast-food attendants, stockers, and cleaning aides fall into this range.

States with higher floors offer significantly different numbers. In Washington, for example, the monthly income reaches US$ 2,664. In the District of Columbia, it exceeds US$ 2,800 per month. Still, these amounts remain insufficient in the country’s largest metropolises.

The figures by state you need to know

State variation is so drastic that it deserves special attention:

Top of the list:

• District of Columbia: US$ 17.50/h
• Washington: US$ 16.66/h
• California: US$ 16.50/h
• New York (state): US$ 15.50/h / New York (city): up to US$ 16.50/h

Mid-range:

• Florida: US$ 13.00/h
• Virginia: US$ 12.00/h
• Texas: US$ 7.25/h (follows federal)

Bottom of the pyramid:

• Georgia: US$ 5.15/h (theoretically; in practice, federal prevails)
• Wyoming: US$ 5.15/h

Important: workers who receive tips (like waiters) can earn an even lower base salary, relying on tips to supplement.

Conversion to reais: numbers don’t always impress

Converting to reais with the 2025 exchange rate (approximately R$ 5.20 per dollar):

Federal minimum wage converted:

• Per hour: US$ 7.25 ≈ R$ 37.70
• Per month (40h/week): US$ 1,160 ≈ R$ 6,032

In Washington DC:

• Per month: US$ 2,800 ≈ R$ 14,560

At first glance, these numbers seem attractive compared to the R$ 1,518 of the Brazilian minimum wage. But here comes the most important factor: the real purchasing power.

The big problem: purchasing power vs. cost of living

One dollar in the United States doesn’t buy the same as one real in Brazil. When we consider the Purchasing Power Parity (PPP), the nominal difference quickly disappears.

Actual costs in the US:

• Basic cost of living (without rent): US$ 1,185/month
• Average rent in major cities: US$ 1,626/month

Adding up: a worker earning the federal minimum of US$ 1,160 can’t even cover rent in medium-sized cities. The numbers simply don’t add up.

Meanwhile, in Brazil, despite the R$ 1,518 minimum wage also being insufficient in large capitals, the relative cost of living is significantly lower, especially in housing.

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

The straightforward answer is: very difficult, in most cases. Even in states with higher floors like California or Washington DC, rents proportionally follow, consuming 60% or more of a minimum wage worker’s monthly income.

People in this situation often:

• Share housing with 2 or more people
• Work more than 40 hours a week
• Hold multiple jobs
• Receive government assistance

The minimum wage in the United States is structurally insufficient for independent living in virtually any large metropolis.

Why does this discrepancy persist?

The federal minimum wage has remained frozen for 16 years, while states progressively raise their floors recognizing inflation. This fragmentation reflects the American political reality: each state understands that its needs are different.

For Brazilians considering a move, the lesson is clear: never negotiate your salary based solely on the minimum value. Research the specific state’s floor, the local cost of living, and — most importantly — refuse offers that match the minimum. The American market offers real opportunities, but only above this baseline.