Could New York City become the next Paris, where weeks of protests over living costs and public services have led to acts of looting, destruction, and violence?
It’s possible if the city continues along the path being laid by democratic socialist Mayor Zohran Mamdani. In his mayoral campaign, Mamdani made expensive promises: a rent freeze, universal free childcare, city-run grocery stores, free buses, and a $30 minimum wage, among them.
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If he makes good on those pledges, New Yorkers may find themselves in the same bind that Parisians do today. Massive budget outlays, economic regulations, and central planning will tamp down long-term economic growth, drain the city’s coffers, and work to the detriment of the very people these programs were supposed to help.
Parisians today have obtained universal health care, rent control, public housing, family allowances, and child-care subsidies, among other programs similar to those proposed by Mamdani. These programs provide short-term benefits but also deepen the economic stagnation that has driven disaffected youth into the streets. France’s debt is soaring, and its unemployment rate has reached 8.2 percent—nearly double the U.S. rate and third worst in the European Union. Youth unemployment exceeds 20 percent.
Mamdani’s policies will fare no better here than they have in France. And if Albany plays along with the mayor’s tax-and-spend plans, it will push New York State’s deficit far above its current three-year total of $34 billion, slowing economic growth, increasing unemployment, and raising prices.
Mamdani has already made good on one campaign promise: freezing rent on 1 million city apartments. “This is a historic victory for New York City tenants,” the mayor said. “I’m grateful for the [Rent Guidelines Board’s] thoughtful consideration of the data, including tenants’ ability to pay, cost of living, and building operating costs.” But the data are clear: a rent freeze may temporarily help tenants of rent-controlled apartments, but it will make housing less affordable, force lower-income residents to leave their un-rent-controlled homes because of gentrification, and harm surrounding neighborhoods in the long term.
Mamdani has made more limited progress on implementing universal childcare, but the data show that this policy would also damage New York’s economy. While targeted policies reducing childcare costs for lower-income residents have shown some benefits, universal childcare does not. The Penn Wharton Budget Model finds that universal childcare would boost short-term GDP by 0.2 percent, but debt-financing the program would cause a 0.2 percent decrease in GDP. In today’s interest-rate environment, that GDP loss would be even greater.
Mamdani has also pledged to raise the minimum wage from $17 an hour to $30 an hour by 2030. Economic analyses have consistently shown that minimum-wage increases worsen job losses, reduce work hours, and raise costs for basic goods. New York State’s minimum-wage increase in the early 2000s reduced employment by more than 20 percent for younger, less-educated workers. Now, just as artificial intelligence is poised to affect the labor market, the mayor wants to make human labor more expensive.
In its design, Mamdani’s city-run grocery store idea is even more socialist than anything found in Paris. He claims that the “core basket of everyday groceries will be 30 percent cheaper” at these stores, but his plan has revealed no efficiencies or innovations to improve an industry that operates on razor-thin profit margins of about 2 percent. In the end, city-run grocery stores are just accounting tricks—grocery costs will be subsidized by the government, which will then recoup these costs through higher taxes. Meantime, small, independent groceries and bodegas could be forced out of the market.
The protests that have engulfed Paris reflect long-term failures of democratic socialism. It’s not too late for New York to avoid a similar fate. Democratic capitalism made New York an economic powerhouse. Given enough time, democratic socialism will turn it into a basket case.