How Does the Minimum Wage Work in the United States in 2025

Understanding the minimum wage in the United States is essential for Brazilians planning to work, study, or move to the country. Unlike Brazil, which has a single national minimum wage, the American system is decentralized and quite complex. The federal minimum wage has remained at $7.25 per hour since 2009, but states, counties, and even cities have the autonomy to set their own minimums. This structure creates a significant disparity: a worker can earn from the federal minimum up to $17.50 per hour, depending on their location.

The Federal System and State Variations

Since 2009, the federal government has maintained the minimum wage at $7.25 per hour — a decision that sparks ongoing debates about its adequacy relative to living costs. However, this figure represents only the national floor. The reality is that most states have already surpassed this amount, implementing their own minimums ranging from $11 to $16 per hour.

Cities with high living costs have established their own policies. New York, Los Angeles, and Seattle, for example, offer the highest minimum wages in the country. The District of Columbia leads with $17.50 per hour, while California and Washington offer $16.50 and $16.66, respectively. This heterogeneity reflects the American philosophy of leaving economic decisions as local as possible, considering regional realities.

How Much Does a Minimum Wage Worker Earn?

Since compensation in the U.S. is based on an hourly model, monthly earnings vary according to hours worked. For a standard 40-hour workweek, the federal minimum wage results in approximately $1,160 per month ($7.25 × 40 hours × 4 weeks). However, this amount only represents the federal baseline and is particularly low for covering basic expenses in most states.

Considering regional variations, a worker in the District of Columbia earning the same hours would make about $2,800 per month ($17.50 × 40 × 4). In California, with $16.50 per hour, the monthly salary would be around $2,640. These differences illustrate how geographic location significantly influences the worker’s actual purchasing power.

Professions and Sectors Earning the Minimum

The minimum wage in the U.S. applies to workers aged 14 and older, employed in regular hours, who are not apprentices or interns, and whose tips do not constitute the main part of their pay. Sectors that frequently adopt this minimum include:

Restaurant and fast-food attendants make up the largest group of beneficiaries. Cashiers in supermarkets, stockers, cleaning aides, and entry-level employees also often work within this wage range. An important note: professionals who rely heavily on tips, such as waiters, may receive a lower base salary, as tips supplement their total earnings.

Minimum Wage by State Comparison

Data from 2025 shows a diverse landscape across the country. Three states — District of Columbia, Washington, and California — have the highest minimum wages, all above $16.50 per hour. New York also stands out, with $15.50 for the state and $16.50 in New York City and neighboring high-cost counties.

At the other end, Georgia and Wyoming officially maintain $5.15 per hour as the state minimum wage, although in practice, the federal minimum of $7.25 applies to most jobs. Between these extremes, states like Massachusetts, Connecticut, Illinois, and New Jersey offer rates between $14 and $15 per hour, following the national trend of gradual increases.

How to Calculate Monthly Income

The calculation of wages in the U.S. follows a straightforward formula. To determine weekly income, multiply the hourly rate by the hours worked weekly. A worker earning $7.25 per hour and working 40 hours a week would make $290 weekly.

To convert to monthly income, multiply the hourly rate by 40 (hours per week) and by 4 (weeks per month): 7.25 × 40 × 4 = $1,160 per month. This method applies universally, regardless of the state. For example, a worker in Washington would multiply $16.66 × 40 × 4, reaching approximately $2,664 monthly.

Conversion to Reais and Purchasing Power Analysis

Using a recent exchange rate of about R$5.20 per dollar, the U.S. federal minimum wage of $7.25 is roughly R$6,032 per month. In the District of Columbia, the $2,800 minimum corresponds to about R$14,560 in reais. At first glance, these conversions suggest a substantial advantage over the Brazilian minimum wage of R$1,518.

However, this literal analysis ignores the key metric: real purchasing power in each country. Experts use Purchasing Power Parity (PPP) for more accurate comparisons. From this perspective, one dollar in the U.S. buys, on average, fewer goods and services than the equivalent in reais in Brazil. Therefore, the nominal difference in reais does not translate directly into equivalent quality of life. Additionally, costs for housing, healthcare, and education in the U.S. are proportionally higher than in Brazil, reducing actual purchasing power.

Is It Possible to Live on Minimum Wage?

The answer for most states is no. Even working 40 hours a week, the federal minimum of $1,160 per month does not cover basic expenses. Cost of living data indicates average expenses of about $1,185 per month just for food, transportation, and utilities — excluding rent. The average rent in the U.S. ranges from $1,200 to $1,626 per month, depending on the region.

The math is simple: $1,160 doesn’t cover the bills when rent alone consumes most of the income. This reality explains why many Americans earning minimum wage supplement their income with government benefits, additional jobs, or family support.

States with higher minimums offer some relief but face the paradox: California, New York, and D.C. also have the highest rents in the country. A worker in Washington D.C. might earn $2,800 but face average rent above $2,000 in central neighborhoods. Thus, even with higher wages, the struggle for subsistence remains challenging.

The minimum wage in the U.S. reflects the tension between stagnant federal policies and constantly evolving local realities. For Brazilians considering moving, it is recommended to research not only the minimum wage of the desired state but also the specific cost of living in the city, study available social benefit programs, and ideally seek positions that pay above the minimum.