A Black Market is usually a term used to describe trade that goes against government controls, such as selling illegal or restricted goods. However, in the Democracy games, a black market is a situation where employers and workers begin using untraceable physical cash instead of bank transactions in order to avoid having to pay taxes.
Black markets increase the perception of Crime within the nation by a small amount. They're caused by a high Corporation Tax, Income Tax, and/or Sales Tax. Abolishing or lowering these taxes or introducing Unemployed Benefits should clear up the market.