This Chart Shows Why New York's Next Mayor Will Be a Democratic Socialist
After-inflation pay has been falling since 2021
Source: Bureau of Labor Statistics
Zohran Mamdani was elected mayor of New York City last week because his relentless emphasis on the high cost of living resonated with many voters. This chart explains why. It shows that inflation-adjusted average hourly earnings of private-sector workers in New York City have fallen almost continuously since the pandemic year of 2021, while the same metric for the United States as a whole stopped falling in 2022 and has since rebounded.
A version of this chart appeared in The Economist and was reprinted in Chartbook, a Substack newsletter by Adam Tooze that I highly recommend. I created my version from Bureau of Labor Statistics data, using the New York metro area consumer price index for the N.Y.C. inflation adjustment.
New York City’s problem is unusual. It was the only one of the 10 biggest U.S. cities to experience a sizable decline in inflation-adjusted median household income from 2019 to 2024, according to a report by James Parrott of the New School’s Center for New York City Affairs. Here’s a table from Parrott’s report. (It also appeared in Tooze’s post.)
I don’t think socialism is the way to make New York more affordable. I agree with Daniel Doctoroff, who was deputy mayor under Michael Bloomberg and later the chief executive of Bloomberg LP. He once told me, when I was working for Bloomberg Businessweek, that the only sustainable way to help the poor and middle class is to have a thriving business sector that generates a lot of tax revenue.
Michael Bloomberg is remembered now for his unfortunate assertion in a 2003 speech that New York City is “a high-end product, maybe even a luxury product.” That fed the notion that New York City aspired to be nothing more than a playground for billionaires.
What is undeniable is that alienating the business sector is a recipe for disaster. But when people feel angry and hopeless, that message falls on deaf ears, and raising taxes on the rich, freezing rents on rent-stabilized apartments and making buses free starts to sound pretty good.
It doesn't help when people see Elon Musk's new trillion dollar contract, ( and his billionaire buddies) and try to reconcile that with the fact that they can't afford rent, education, groceries, day care, health care etc, even with two or more jobs.
Interesting stat. In isolation seems significant. Question it raises, which is very important to test your conclusion, is why is NYC such a an outlier. Did the rich change their tax address to a location outside NYC, which could have a substantial impact on real wages? If so, would Mamdani’s tax policy have any appreciable residual impact on whether they stay or go?