Minimum Wage refers to the smallest/lowest daily, hourly, weekly, or monthly remuneration employers legally pay to workers. It also represents the minimum wage laborers may auction their labor. Defenders of minimum wage argue that it increases workers’ standards of living, reduces poverty and inequality as well as boosts morale and forces business units to be more efficient. On the other hand, opponents of minimum wage argue that it increases un-employment especially among low productivity workers such as less-skilledworkers who may be excluded from the labor market (Waltman, 2008).
Minimum wage on one hand encourages and motivates workers to work extra hard towards realizing organization goals, stimulates consumption by increase disposable income of the low-income people and increases work ethics of workers who earn little. Conversely, minimum wage affects small and medium businesses more than large businesses, reduces workers’ quantity demandedthrough reduced number of working hours or reduced number of available jobs. It also leads to inflation when businesses fight to compensate high labor costs by rising prices of goods they sell (Waltman, 2008).
Farm subsidies refer to the extended supportive payments to agribusiness and farmers from the federal governments to stabilize the economic during the depression. This is aimed at ensuring a steady supply of domestic food. Farm subsidies influence the cost and supply of agricultural commodities such as fertilizers, feed grains (maize, corn etc), cotton, tobacco as well as oilseeds such as soybeans (Melendez et. al., 2009).
Black market is the market in which merchandise is sold illegitimately by sellers at a price than the controlled legal maximum price or ceiling price. It enlarges on account of surplus demand in the market. Sellers dispose their goods at abnormally higher prices in order to create super profits. Similarly, buyers purchase more quantity of the goods at higher prices (Patterson, 2006).