The mystery of the minimum wage in the United States: why numbers deceive

Have you ever wondered why the minimum wage in the United States seems so different from Brazil? The answer goes far beyond a simple currency conversion. This article debunks the myth that earning in dollars automatically means prosperity, analyzing how the American system works and why workers in the US face challenges similar to Brazilians, despite seemingly higher numbers.

The Decentralized Structure: Why There Is No Single Floor in the US

Unlike Brazil, where there is a national minimum wage set by the federal government, the United States operates under a hybrid and fragmented model. The federal minimum remains at US$ 7.25 per hour since 2009 — practically frozen for 16 years — but this is only the minimum base.

States, counties, and even municipalities have full autonomy to set their own rates. Result? A worker in the District of Columbia earns US$ 17.50 per hour, while in states like Georgia and Wyoming, the legal minimum is only US$ 5.15 (although, in practice, the federal rate of US$ 7.25 prevails in most jobs).

This decentralization creates a scenario where the minimum wage in the United States varies drastically depending on the geographic location, directly reflecting the local cost of living.

Hour by Hour: How the American System Really Works

For Brazilians used to a monthly payroll, the hourly model requires a change in mindset. All calculations start here:

Federal minimum scenario:

• US$ 7.25/hour × 40 hours/week × 4 weeks = US$ 1,160/month

High minimum wage scenario (District of Columbia):

• US$ 17.50/hour × 40 hours/week × 4 weeks = US$ 2,800/month

Sounds simple? The problem arises when we consider that this 40-hour workweek is the standard minimum, not the maximum. Many workers can increase their income simply by working overtime, which leads us to a crucial point: salary variability exists not only between states but also among individuals working in the same position.

The State Rankings: Where Is the Highest and Lowest Floor

Data from 2025 reveal impressive disparities within the American territory itself:

At the top of the scale:

• District of Columbia: US$ 17.50/h (about R$ 91 considering an approximate exchange rate of R$ 5.20)
• Washington: US$ 16.66/h
• California: US$ 16.50/h
• Massachusetts: US$ 15/h
• New York: US$ 15.50/h (up to US$ 16.50 in metropolitan areas)

At the bottom of the scale:

• Georgia: US$ 5.15/h
• Wyoming: US$ 5.15/h
• Textura: US$ 7.25/h (aligned with federal)

An important note: states with higher minimum wages — California, Washington, and D.C. — also have the highest rents in the country, partially neutralizing the salary advantage. It’s the paradoxical effect of the American real estate market.

Conversion to Reais: The Mistake That Seems to Be an Advantage

When converting the federal minimum wage (US$ 1,160) to reais using the 2025 exchange rate (approximately R$ 5.20 per dollar), we arrive at a value of R$ 6,032 per month. Compare this with the Brazilian minimum wage of R$ 1,518 in 2025, and the illusion of opportunity becomes apparent.

However, this direct comparison is misleading. The Purchasing Power Parity (PPP) — a metric used by economists for fair comparisons — reveals an uncomfortable truth: one dollar in the US buys fewer products and services than the equivalent in reais in Brazil. It means that the absolute difference in reais does not translate linearly into a higher quality of life.

Expanded conversion for different realities:

In the District of Columbia (US$ 2,800/month):

• Gross conversion: R$ 14,560/month
• But the local cost of living is proportionally higher

In the federal scenario (US$ 1,160/month):

• Gross conversion: R$ 6,032/month
• But basic costs do not decrease proportionally

Why Doesn’t the US Minimum Wage Add Up?

This is perhaps the most important question. Even earning in dollars, most workers receiving the minimum in the US cannot sustain themselves with dignity. Here are the real numbers:

Average monthly expenses in the US:

• Basic living costs (food, transportation, utilities): US$ 1,185
• Average rent in urban areas: US$ 1,626
• Total: US$ 2,811

Compared to the federal minimum wage of US$ 1,160, there is a deficit of US$ 1,651 per month — meaning the worker would operate at a loss.

Even in states with higher wages, the phenomenon repeats. In California, where the minimum is US$ 16.50/hour (US$ 2,640/month), the average rent in San Francisco exceeds US$ 2,500 — leaving only US$ 140 for all other expenses.

Who Actually Receives the Minimum Wage in the US?

The minimum wage applies to specific categories of workers:

• Over 14 years old employed under standard conditions
• Professionals without leadership or specialization roles
• Restaurant and fast-food attendants
• Cashiers in retail
• Stockers and warehouse helpers
• Cleaning and maintenance crews
• Supermarket employees in operational positions

An important nuance: waiters, bartenders, and professionals working with tips often receive a lower base salary (in some states, US$ 2.13/hour), compensated by the expectation of tips from customers. This is a cultural controversy point among recent Brazilian arrivals, accustomed to full base salaries.

Brazil vs. US: Which Offers Better Real Conditions?

The structural comparison reveals a more nuanced scenario than it seems:

Brazilian Model:

• Unified national floor at R$ 1,518
• Set and adjusted annually by the government
• Insufficient to cover living costs in capitals
• But with greater predictability and uniformity

American Model:

• Federal floor at US$ 7.25 (frozen since 2009)
• Supplemented by state and municipal floors
• Ranges from US$ 5.15 to US$ 17.50 depending on location
• Offers mobility: work in a state with a higher minimum wage

The big difference? The US allows you to choose your state — and therefore your minimum wage. A worker in Wyoming (US$ 5.15) can move to Washington D.C. (US$ 17.50) and triple their income. This professional mobility is rarely seen in Brazil.

Can You Live on Minimum Wage in the US? The Brutal Answer

No, except in very specific circumstances. With the federal minimum of US$ 1,160 per month, life becomes practically unsustainable in any American city with a robust job market. The real alternatives for low-income workers are:

• Sharing housing: splitting rent with 2 or 3 people reduces individual costs
• Working overtime: expanding from 40 to 50+ hours weekly
• Seeking states with higher floors: moving to places like Washington or California
• Supplementing with government benefits: access to food stamps, Medicaid, and housing assistance

States with higher minimum wages offer marginally better viability but do not eliminate the reality: the US minimum wage, at any level, requires supplementing with other income sources to maintain a basic standard of dignity.

Conclusion: Numbers Deceive, Reality Does Not

The minimum wage in the United States appears as an enigma: numerically attractive when converted to reais but structurally insufficient when confronted with real costs. The decentralized system, while allowing professional mobility, also amplifies regional inequalities.

For Brazilians considering moving to the US, the lesson is clear: it’s not enough to research the US minimum wage in absolute terms. It’s necessary to investigate the specific cost of living in the state, the local job market, and crucially, the real possibilities for professional advancement — because remaining at the minimum wage indefinitely is not a viable option anywhere.

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