When Congress crafted the Fair Labor Standards Act (FLSA) during 1937 and 1938, there appears to have been little concern about how its provisions might affect the territories and possessions of the United States. Gradually, through various procedures and over different time periods, the federal minimum wage has come to be applied in most of these jurisdictions. In Puerto Rico and the Virgin Islands, implementation was gradual, utilizing special industry committees (SICs) . A parallel SIC was created for American Samoa during the middle 1950s. By the late 1980s or early 1990s, the SICs for Puerto Rico and the Virgin Islands had been phased out. For Samoa, the SICs seem to have had little effect in raising wage rates, though the procedure remained in place, intermittently, until the summer of 2007 when it was abolished. The FLSA was immediately applicable to Guam, though it was only enforced about two decades later, in 1959-1960. The case of the Commonwealth of the Northern Mariana Islands (the CNMI) is somewhat different. The CNMI was acquired by the United States in the wake of World War II. With the creation of the United Nations, the island group was assigned to the United States as part of the Trust Territory of the Pacific Islands. By the mid-1970s, the islands had entered into a Covenant of Association with the United States under their current Commonwealth status. In doing so, they retained responsibility for the insular minimum wage—and exercised control over aspects of insular immigration policy. As conditions developed, goods produced in the CNMI were to be marketed as "Made in America." Combining the advantages of low wages (lower than those required in most other U.S. jurisdictions), the availability of alien contract labor from China and elsewhere, and the right to use a "Made in America" label for marketing purposes, the relatively small CNMI developed a substantial production industry. This was especially notable in garments. Over time, the alien labor force came to equal the natives of the CNMI and allegations of "sweatshop" conditions began to surface. At the same time, there were affirmations that entrepreneurs of the CNMI had done very well for themselves—that is to say, a business success story. Thus, among U.S. territories and possessions, the minimum wage had remained unresolved in American Samoa and the CNMI. Various bills were introduced during recent Congresses that would have increased the general minimum wage and, at the same time, extended the federal standard to the CNMI. In addition, some have suggested a modified restructuring of the Covenant of Association with regard to minimum wage and immigration—and with respect to marketing of CNMI products as "Made in America." As a result of the enactment of H.R. 2206 ( P.L. 110-28 ), procedures have now been added to the FLSA that will bring the insular minimum wage up to mainland standards. This report is an introductory sketch of the role of the minimum wage in the territories and possessions of the United States. Omitted are nuances of policy that might rightly deserve more extended study. As adopted in 1938, the FLSA (P.L. 75-718) defined state as "any state of the United States or the District of Columbia or any Territory or possession of the United States." No distinctions were made between the states and the other jurisdictions where FLSA wage/hour policy was concerned. The general concept of the FLSA appears to have evolved from experience under the National Industrial Recovery Act (the NIRA, 1933-1935). The NIRA was basically voluntary, depending for much of its even limited success upon the goodwill of the several parties. Though the NIRA encountered problems dealing with the territories (notably, with Puerto Rico), there was built into the act a flexibility which, initially, the FLSA did not seem to enjoy. The NIRA was declared unconstitutional in 1935—but, still, it was very much on the minds of the Members of Congress in 1937 and 1938 and framed much of the context of the wage/hour debates of that period. In 1938, the FLSA set a minimum wage of 25 cents per hour for covered workers, with step increases to 30 cents per hour one year after enactment and to 40 cents per hour seven years after enactment. However, the act also provided for a system of special industry committees (SICs) "for each industry engaged in commerce or in the production of goods for commerce." The Administrator of the Wage and Hour Division at the Department of Labor (DOL) was thus permitted to examine the several covered industries and, "as rapidly as is economically feasible without substantially curtailing employment," to increase the federal minimum wage for particular industries through administrative processes. Such administratively set minima were not to exceed 40 cents per hour—nor were they to fall below the level fixed by the statute for each statutory step increase. The Administrator could reject SIC recommendations and/or remand the matter to the committee (or to another committee). These administratively determined wage rates were to have effect only through a seven-year period. Thereafter, the 40-cent minimum would become applicable. Congress did not seem to anticipate immediate appointment of industry committees and, indeed, they came into being only gradually. Section 8 mandated that the Administrator "shall from time to time convene the industry committee for each such industry, and the industry committee shall from time to time recommend" the appropriate wage rates—taking into account "economic and competitive conditions." It directed that such rates "not give a competitive advantage to any group in the industry" but, rather, that they should take into account "transportation, living, and production costs." Nor was the age of the worker to be a part of the equation. In general, the industry committee was a vehicle for upward movement of wage rates. Its discretion involved only the interim area between the statutory floor (25 cents an hour) and an upper level of 40 cents per hour. Several factors came into play under the special industry committee procedures. Congress sought to provide for the establishment of the "highest minimum wage rate" consistent with the statute. However, it was equally determined that institution of the minimum rate should not "substantially curtail employment. And, finally, it provided that any committee-established sub-minimum rates would "not give a competitive advantage to any group in the industry." Each of these issues was discussed at some length during the initial debates on the FLSA. The provision for industry committees under Section 5 and Section 8 has provided, through the years, a context for minimum wage treatment of some insular jurisdictions—though that was not, it appears, initially its purpose. In the 1938 statute, Puerto Rico was covered under the FLSA in the same manner as the states of the Union. However, between 1940 and 1996, it was afforded special treatment through a system of specially industry committees (SICs). Now, the minimum wage treatment of Puerto Rico is on a par with the several states. Puerto Rico (with its capital at San Juan) was acquired by the United States as a result of the Spanish-American War (1898). Although its ultimate status would remain somewhat ambiguous, the island developed institutions that closely paralleled those of the states. Just as several states had experimented with minimum wage laws early in the century, so did the Puerto Rican legislature which adopted such a requirement in 1919. Insular wage rates, however, remained far below those for most mainland workers through the 1930s. When, with the enactment of the FLSA in 1938, Puerto Rico was mandated to increase its wage floor, interests on the island argued that it would be hard pressed to do so without serious economic dislocation. The upward flexibility permitted through the special industry committee structure may have been useful for the mainland but, for Puerto Rico, some argued that even the 25 cent floor may have been "too high." During 1939-1940, various industry groups pressed for "remedial legislation for Puerto Rico on [the] matter of wages-and-hours law," claiming that "failure to secure relief means the total collapse of industries vital to our economic structure and [unemployment for] thousands of wage earners dependent thereon." In 1940, Congress enacted new legislation designed specifically for Puerto Rico and the Virgin Islands. It allowed the FLSA minimum wage requirements to be set aside and replaced with special industry wage floors. These minima, to be developed by industry committees operating in cooperation with the US-DOL, were intended to reflect insular economic realities. Deviation from the national minimum wage under the FLSA was allowable "only for so long as and insofar as such employee is covered by a wage order issued by the Administrator [of the Wage and Hour Division within the US-DOL] pursuant to the recommendations of a special industry committee." The intent of this special arrangement for Puerto Rico and the Virgin Islands was to bring the two jurisdictions up to the standards observed by the states as rapidly as might be economically feasible without substantially curtailing employment. At the same time, the committees "were prohibited ... from recommending a minimum wage rate that would give any native industry a competitive advantage over its counterpart in the United States." The process of increasing wage parity with the mainland continued through more than half-a-century. During consideration of the 1989 FLSA amendments, Congress revisited the case of Puerto Rico—as it had through the years. It was found that, in most areas of production, the insular employers were meeting national standards. The 1989 enactments, thus, eliminated the special industry committee system for Puerto Rico and mandated, through a series of step increases in the insular wage structure (under the FLSA), that all covered workers be paid not less than the applicable federal minimum wage after April 1, 1996. Under the FLSA of 1938, the Virgin Islands were covered in the same manner as the several states. However, during the period 1940 to 1989, there was a time when wage rates were fixed by special industry committees—as had been the case with Puerto Rico.