Price floors, price supports.

Price floors are government-mandated minimum prices for goods and services. The U.S. federal government has passed laws stating that the price for certain goods and services cannot go below a set amount. Unlike price ceilings, which are intended to keep prices low to protect consumers, price floors are designed to keep prices high to help producers. In the United States there are two kinds of price floors: minimum wage laws and price supports for agriculture.
A minimum-wage law sets the lowest hourly rate that firms may legally pay workers. Minimum-wage laws were first enacted in 1938 during the Great Depression with the goal of ensuring that low-income workers have a decent standard of living. In 1938 the minimum wage was set at 25 cents per hour, which was approximately 40 percent of the average manufacturing wage at that time.
The impact of minimum-wage laws depends on the prevailing wage in the marketplace. In 2001 the minimum wage was $5.25, but in many markets even the lowest-paid workers received more than the minimum amount mandated by law. In these markets, minimum-wage laws have no impact on the number of people employed. In markets where employers could hire workers for less than the minimum wage, the minimum-wage law causes employers to reduce the number of workers they hire because the price is higher and increases the number of workers willing to work because the wage is higher. Those workers who find jobs at the minimum wage earn a higher level of income, but other workers who would have been willing and able to find jobs at the lower market wage cannot find work. Critics of minimum-wage laws argue the laws do not help people maintain a decent standard of living, because most people working at minimum wages are not the primary breadwinner in poor families but rather teenagers or parttime workers adding to a family’s income.
Price supports for farm products were also initiated during the Great Depression (1933). Minimum prices were established for many basic agricultural products, including cotton, wheat, soybeans, sorghum, tobacco, and dairy products. The goal of price supports for agricultural products was parity, keeping the prices of farm products, adjusted for inflation at historical levels. This would aid the family farm and maintain resources in agriculture. Like minimum-wage laws, if the market price for products covered by the price-support system was greater than the price floor, the laws had no effect on the market. If, however, the market price was lower than the support price, farmers could sell their output to the government at the support price. The government would sell excess supply in world markets at the lower price, absorbing the loss, or would sometimes give excess output to school-meal programs or poor foreign countries through the Food for Peace Program. In 1996 the federal government eliminated price supports for most agricultural products, but within a few years agricultural interests were again lobbying for the supports.
See also wage and price controls.
Further reading
Miller, Roger Leroy. Economics Today. Boston: Addison Wesley, 2001.