If you’re an employer feeling squeezed by rising labor costs, you’re not imagining things. In 2025, 21 U.S. states have raised their minimum wage rates again — with California leading the pack at a $16.50 hourly minimum wage, and some cities in Washington pushing well past $21 per hour. That’s the highest minimum wage ever recorded in the U.S. so far. Meanwhile, 15 states, including Georgia and Wyoming, are still operating under the federal minimum wage of just $7.25 per hour, making them the states with the lowest minimum wage.
This growing wage gap isn’t just a headline — it’s a wake-up call for startups and scaling businesses struggling to balance budgets. With new minimum wage laws driving up payroll and minimum wage compliance getting more complex, many founders are starting to look beyond U.S. borders.
And here’s the kicker: while U.S. employers battle over wage requirements, the average monthly salary for a skilled remote worker in the Philippines hovers around $330–$500. That translates to a wage rate of just $1.90 to $3.10 per hour — a fraction of the cost, without sacrificing talent.
So, if you’re wondering how to stay competitive in a world of fast-changing state wage laws and increasing minimum wage rates by state, it might be time to consider smarter, more scalable solutions.
The Highest and Lowest Minimum Wages in the U.S. (2025 Update)
The minimum wage in 2025 paints a dramatic picture of wage disparity across the U.S. While some states push toward a living wage, others are still clinging to numbers that haven’t budged since 2009.
Let’s break it down.
States with the Highest Minimum Wages in 2025
Leading the charge is California, with a state minimum wage rate of $16.50 per hour. Cities like San Francisco, Seattle, and Tukwila are even higher due to local minimum wage laws, some exceeding $21 per hour — a number that would’ve been unthinkable a decade ago.
These higher minimum wage laws are designed to keep pace with inflation and cost of living in major metro areas. Local governments have implemented wage requirements annually based on inflation, and many states have set higher minimum wages than the federal baseline.
The Economic Policy Institute reports that 21 states raised their hourly minimum wage in 2025, aiming to support workers amid rising costs of living. But for employers, especially startups and SMBs, these wage increases are triggering a serious rethink of labor strategy.
States with the Lowest Minimum Wages
On the flip side, 15 states have not updated their statutory minimum wage and still follow the federal minimum wage of $7.25 per hour, set by the Fair Labor Standards Act. Georgia and Wyoming are at the bottom of the list, with state-level wages technically set at $5.15, but defaulting to the federal rate due to compliance rules.
This creates a strange economic split: while one startup is paying over $20 per hour for local support in California, another in Mississippi could legally pay a little over $7 — assuming they can find talent willing to work at that rate.
So where does this leave you as an employer?
Facing unpredictable wage increases, regional minimum wage structures, and mounting minimum wage compliance headaches, many companies are turning to global minimum wage comparisons. Countries like the Philippines offer a stable wage rate, world-class English-speaking talent, and a much more predictable cost structure — no matter what the U.S. labor market is doing.
Minimum Wage Rates by State (2025 Overview)
| Category | State/City | Minimum Wage Rate (2025) | Notes |
|---|---|---|---|
| Highest Minimum Wage | California | $16.50/hour | Highest state-wide base; some cities even higher |
| City-Level High | Tukwila, WA | $21.75/hour | Among the highest local minimum wages in the U.S. |
| City-Level High | Seattle, WA | $19.97/hour | Adjusted annually based on inflation |
| City-Level High | San Francisco, CA | $18.67/hour | Reflects city-specific cost of living |
| Above Federal Rate | New York, MA, CO, AZ, etc. | $14–$17/hour | Many states with higher minimum wages than federal |
| Federal Minimum Wage | National (Baseline) | $7.25/hour | Has not increased since 2009 |
| Lowest Minimum Wage | Georgia, Wyoming | $5.15/hour* | Lower than federal but must follow $7.25/hr per federal compliance |
| States Defaulting to Federal | 15 States (e.g. TX, MS, SC) | $7.25/hour | No independent state minimum wage laws |
*Note: Although Georgia and Wyoming set a lower minimum wage, federal law overrides, requiring at least $7.25/hour for covered employees.
Why Minimum Wage Laws in 2025 Are Reshaping Employer Strategy
The minimum wage landscape in 2025 isn’t just a policy update — it’s a strategic fork in the road for every employer.
With the highest minimum wage rates creeping above $20 per hour in some cities, and the lowest minimum wage still stuck at the federal baseline of $7.25, businesses are now operating in a highly fractured labor market. What used to be a standard wage rate has become a maze of state minimum wage laws, local wage requirements, and annual adjustments tied to inflation.
Rising Costs, Rising Stakes
Employers in states with the highest and lowest minimum wages face different but equally pressing challenges. In high-wage jurisdictions like California and Washington, it’s a matter of staying profitable while absorbing fast-rising labor costs. Meanwhile, states that follow the federal minimum wage may attract budget-conscious employers — but often struggle to retain talent or stay competitive in terms of service quality.
The Economic Policy Institute and other labor analysts have flagged this disparity as unsustainable. As more states set their own minimum wage laws, and localities raise the city minimum wage, the pressure to increase the minimum wage nationally continues to mount.
Minimum Wage Compliance Headaches
Navigating minimum wage law isn’t just about knowing the number. It’s about knowing which number applies where, when, and for whom. For businesses operating across multiple states — or even just across county lines — staying compliant with state wage laws, hourly wage regulations, and local ordinances is becoming a full-time job.
Miss a minimum wage change, and you’re looking at fines, legal risks, or worse — public backlash. That’s why many employers are now comparing the minimum wage by country, looking at global minimum wage structures to find scalable, predictable alternatives.
The Strategic Shift: Look Beyond Borders
Here’s the pivot point: if your base wage is no longer predictable, why not base it somewhere else?
Countries like the Philippines offer a compelling contrast to the fragmented U.S. model. With a consistent, predictable minimum wage rate and a rapidly growing workforce, it’s no surprise that many startups are outsourcing roles that are now prohibitively expensive to hire domestically.
In 2025, making smart decisions about where your team is based could be the difference between surviving… and scaling.
Outsourcing vs. In-House: Wage Rate Comparison in 2025
In 2025, more startups are asking the same question: why burn through your runway on U.S. wages when high-quality global talent is available at a fraction of the cost?
U.S. Wage Pressure Is Real
If you’re hiring in a state with the highest minimum wage, like California, you’re already paying at least $16.50 per hour — and significantly more in cities like San Francisco or Los Angeles. In Washington, city wage laws have pushed the hourly minimum wage beyond $21 per hour in some metro areas.
Even in states that follow the federal minimum wage of $7.25 per hour, the rising cost of living, employee expectations, and compliance with local minimum wage laws make it hard to compete — especially when states with the highest minimum wage continue to raise the minimum wage annually based on inflation.
As an employer, whether you’re managing payroll in New York City, navigating wage updates in Colorado, budgeting for seasonal staff in Texas — or partnering with a reverse headhunting firm to secure top talent without bidding wars — the reality is the same: labor costs are rising fast.
How the Philippines Compares
Now let’s zoom out and consider the global minimum wage landscape. In countries like the Philippines, the minimum wage rate is far more stable and predictable. In 2025:
- The monthly minimum for skilled professionals ranges between $330–$500, depending on experience and location.
- That translates to roughly $1.90 to $3.10 per hour — more than 80% less than even the lowest minimum wage found in the U.S.
When comparing minimum wage by country, the Philippines stands out as one of the most cost-efficient destinations with high English fluency, strong work ethic, and cultural alignment with Western teams.
Living and Doing Business in the Philippines
The Philippines is fast becoming a top destination for businesses seeking growth and a high quality of life. With its strategic location in Southeast Asia, a young, skilled workforce, and strong English proficiency, it’s an ideal place for entrepreneurs and companies to expand.
Wage Rate Snapshot: U.S. vs. Philippines (2025)
| Role | U.S. Average Wage (2025) | Philippines Average Wage (2025) |
|---|---|---|
| Accountant | $17–$22/hour | $2.50–$3.50/hour |
| Virtual Assistant | $15–$20/hour | $2.00–$3.00/hour |
| Junior Developer | $30–$40/hour | $5.00–$7.00/hour |
That’s not just lower overhead — it’s full access to skilled professionals without the ever-changing stress of U.S. state minimum wage laws and wage requirements.
Global Thinking for Lean Teams
In a world where states and localities set complex, often conflicting minimum wage laws, the most strategic move might just be simplifying your talent model. That’s why a growing number of startups are leveraging remote teams abroad — not only to reduce payroll, but to expand capability and resilience.
And let’s be real: your customers care about results. Whether your support rep is in Nebraska or Manila, what matters most is how fast they answer the phone and how well they solve problems.
How to Successfully Outsource to the Philippines in 2025
By now, it’s clear: when comparing minimum wages in the world, the Philippines offers one of the most favorable wage rate environments for startups and small businesses. But success isn’t just about saving on the minimum wage rate — it’s about building systems that work across time zones, cultures, and business models.
Here’s how to do it right:
1. Start with Roles That Are Easy to Delegate
Many U.S. employers begin with roles like:
These positions have clearly defined outputs and don’t rely heavily on U.S. state minimum wage laws, local wage requirements, or wage compliance complexity.
Instead of worrying whether the minimum wage applies or if you’ve breached a local wage law in New York City or Nassau County, you can focus on output and efficiency.
2. Understand the Local Talent Market
The Philippines has a highly educated, English-speaking workforce that’s familiar with Western communication styles. Unlike the fluctuating minimum wage by country seen in parts of Europe or Latin America, the Philippines maintains a stable statutory minimum wage, updated predictably by its Department of Labor and Employment.
That’s a sharp contrast to the U.S., where states with the highest minimum often change rules every year — like California’s $16.50/hour or Seattle’s hourly minimum wage approaching $22.
3. Choose the Right Hiring Model
You have options:
- Freelancers (via platforms like Upwork or OnlineJobs.ph)
- Outsourcing Agencies (offering fully managed teams like iScale Solutions)
- Direct hiring (through local job boards)
Each model has different wage structures, but all offer significant relief compared to U.S. state minimum wage rates. For instance, hiring a full-time virtual assistant at $500/month equates to about $2.90/hour — far below the U.S. federal minimum wage of $7.25/hour, let alone cities with the highest minimum wage.
4. Use Clear Communication & Processes
Don’t let timezone differences be a dealbreaker. Most Filipino professionals are flexible and happy to work U.S. hours. Use tools like Slack, Notion, Loom, and Google Workspace to standardize workflows and minimize back-and-forth.
Even more critical: document your SOPs. Just like states and localities need clear laws and regulations, your remote team needs clarity to thrive.
5. Pay Fairly — Even If It’s Still a Bargain
Yes, wages are lower — but offering competitive rates (above the national minimum wage) and incentives builds loyalty fast. Remember, what feels like a small bump for you can be life-changing for your team. This isn’t just about hiring below the current federal minimum wage — it’s about building a sustainable, human-centered operation.
What’s the Average Salary in the Philippines in 2025?
Curious about the average salary in the Philippines for 2025? Salaries are projected to rise by 5.5%, with the average monthly income reaching approximately ₱44,800 (around $780). Dive into the full article to explore detailed salary trends and insights
Where Do You Go From Here?
In 2025, staying competitive means looking beyond borders. While U.S. businesses grapple with state minimum wage rates, rising minimum wage requirements, and the complexities of state minimum wage laws, the global market offers a clear alternative. The difference between paying $16.50 per hour in California or $2.90/hour in the Philippines isn’t just about cost — it’s about strategic survival.
For employers stuck between the highest and lowest minimum wage pressures in the U.S., it’s no longer a question of if you should adapt — but when.
Whether you’re navigating wage laws in states with the highest minimum, or trying to scale a team without breaking the bank, outsourcing could be the most effective way to stabilize your workforce. And when it comes to exploring minimum wages in the world, the Philippines remains a top country in 2025 for value, talent, and ease of collaboration.
Ready to future-proof your team?
Let iScale Solutions help you build and manage a high-performing offshore team — without the headaches of domestic minimum wage law, shifting wage policy, or escalating local salaries.
Contact iScale Solutions today and take your next smart step toward growth.
Frequently Asked Questions
1. What should employers consider when setting wages for international hires?
When hiring abroad, it’s essential to understand the minimum wage rate in that country and ensure you’re meeting or exceeding it. While U.S. employers are familiar with minimum wage laws like the federal minimum wage of $7.25 per hour, international markets follow different statutory minimum wage standards. Always review local wage requirements to stay compliant and competitive — especially in countries with lower labor costs but high demand for skilled talent.
2. Is the Philippines a good option for global teams in 2025?
Yes, the Philippines remains one of the best countries in 2025 for outsourcing. With a favorable minimum wage rate, strong English proficiency, and cultural alignment, it’s ideal for remote roles. Filipino professionals typically earn monthly minimum wages far below U.S. standards, with typical wage rates between $2 and $4 per hour, depending on experience. For startups expanding globally, it’s a smart move for both budget and team performance.
