How $29 sandwiches pushed New York to socialism

Telegraph

5 hours ago

As New York baked under a record-breaking heatwave this week, Wall Street was left sweating for an entirely different reason.
'It's officially a hot commie summer,' hedge fund billionaire Dan Loeb said on social media, sounding the alarm after Zohran Mamdani's unexpected triumph in the Democratic mayoral primary.
Donald Trump, in typical fashion, went further.
'A 100pc Communist Lunatic … is on his way to becoming Mayor. We've had Radical Lefties before, but this is getting a little ridiculous,' he said.
By defeating centrist Andrew Cuomo ahead of November's election, Mamdani is promising to shake up the city with a package of policies straight from the Jeremy Corbyn playbook.
Whether it be rent freezes, tax hikes on companies and high earners, free childcare or a city-run chain of grocery stores, the firebrand young socialist's proposed policies have sent Wall Street financiers and Big Apple property developers scrambling.
However, for many others in the city, the cricket-playing, first-generation Muslim-American has struck a chord.
New Yorkers almost always return a Democrat mayor, but seldom have they strayed this far from the political mainstream. How did Mamdani coax voters away from the centre ground?
'New Yorkers are struggling'
The answer lies in the queues of young people outside the door of every vacant flat to rent in central New York, and in the Reddit forums where New Yorkers moan about paying $20 plus (£15) for a sandwich.
The cost of living has soared and wages aren't keeping up. And while the squeeze is universal, it's Gen Z who are feeling it the most.
'The New York City that I grew up in was a middle-class city, and it was also a manufacturing city,' says Steven Cohen, a public affairs professor at Columbia University. 'We don't do any of that now.'
Young people come for the attractive jobs, but nowadays they move away to raise a family. Only in the outer boroughs, Cohen says, is New York still a conventional town of blue-collar and white-collar families.
'The economic changes to New York City over the last half-century have resulted in a different kind of city, and a different kind of politics. And it is extremely expensive to live here, even on a high income.'
Eric Adams, the incumbent mayor – elected as a law-and-order Democrat but now, after a corruption scandal, running for re-election as an independent – issues a slew of stats suggesting New York is in a better place than before the pandemic.
But the numbers that New Yorkers can see and feel around them tell a different story. Andrew Kimball, the chief executive of the city's Economic Development Corporation, admitted as much in a report earlier this year.
'We know that many New Yorkers are still struggling,' he said. 'We've added many jobs but not enough homes. Top earners in New York City are beating the rest of the country, but lower earners aren't doing much better here than they could elsewhere.
'If we can't blunt the sharpest disparities between soaring highs and stubborn lows, between communities of colour and white New Yorkers, we may lose what makes our city so magical: our people.
'We must make our economy work for everyone.'
In an attempt to rescue the narrative, Kimball also pointed to the record highs that New York posted last year for the number of people in employment and the labour force participation rate. But jobs growth is slowing quickly.
Mamdani, meanwhile, has zeroed in on the disparities lurking beneath the headline figures.
The unemployment rate among Black New Yorkers was 8.5pc in the third quarter of last year, while for Hispanics it was 6.7pc. But among whites, the rate last year averaged 3.3pc.
The inequalities aren't just between ethnic groups, but also between different parts of the labour market. The median shop assistant in New York earns almost 13pc more than the national median for retail, but the median lawyer makes 56pc more than lawyers nationwide.
Price politics
Prices in New York are climbing faster than in other big cities.
The inflation rate in New York has been hovering around 4pc, almost double the 2pc recorded nationwide. By comparison, Miami and San Francisco have inflation rates of 2.2pc and 1.3pc, respectively.
Figures show that pay packets aren't keeping pace with these prices. Inflation-adjusted wages in New York fell 3.7pc in 2023, compared with 0.9pc nationwide.
This trend created a ready market for one of Mamdani's most eye-catching TikTok videos: his lament over 'halal-flation' – the price of a street-van doner kebab.
After hanging out at the vans, he told followers that the vendors were being punished by the New York permit system, which he could sort out. Crucially, he said this would cut the cost of a kebab from $10 to $8.
His other remedy was to suggest that the city could set up and run its own chain of lower-cost grocery stores. Retail billionaire John Catsimatidis has already told CNN that his Red Apple Group grocery chain would leave New York if this were the case.
'We don't want to do business with socialists,' he said.
But the cost of a kebab is small change next to the biggest financial headache for New Yorkers: sky-high rents.
In a city where two-thirds of people rent, the vacancy rate of 1.4pc is the lowest in decades. And it keeps getting worse: in the past decade, for every 5.7 new jobs created, only one new housing unit was built. And in a supply-demand crunch, rents rise faster than incomes.
'Households at the 40th percentile of the income distribution in New York City may have Chicago or Dallas incomes, but they are expected to pay New York City prices for market-rate units,' Kimball said.
Mamdani's answer is to 'freeze the rent'. More than half of New York rents – mostly relating to blocks over 50 years old – are already subject to rental controls, known as 'rent stabilisation'. This limits rent increases to 3pc.
But the proportion of units that are rent-stabilised has dropped from two thirds in 1999 to just above 50pc. The rest are at market rate. To afford a median asking rent, a household must earn $120,000 per year, well above what a typical 20-something would earn.
Mamdani's people
The people caught in this trap are, in theory, Mamdani's people.
'We have won because New Yorkers have stood up for a city they can afford,' he said in his victory speech.
'A city where they can do more than just struggle. One where those who toil in the night can enjoy the fruits of their labour in the day.'
But although Mamdani has evidently won over the idealistic young, his appeal, like many socialists, does not necessarily extend to the working-class districts for which he claims to speak.
Figures compiled by The New York Times showed that Mamdani's strongest support – where he captured 40pc or more of the vote – was in higher-income and middle-income neighbourhoods, and among college graduates.
Although he also hit 48pc support in precincts with more Hispanic voters, that dropped to 38pc in lower-income districts and 34pc in heavily Black neighbourhoods.
The other question mark over his broader appeal is that barely 10pc of New York voters participated in the Democratic primary, and they are likely to be the most ideologically motivated of electors.
'In the general election, this is why [independents] Bloomberg and Giuliani won,' Columbia's Cohen says.
'You've got a much different ideological composition. Even Trump did a lot better last election than he did the first time in New York City.'
This has left those fearful of Mamdani with an avenue to beat him, particularly if they can coalesce around a single candidate. This is most likely to be Adams, the centrist Democrat, who can run again as an independent after Trump quashed his federal fraud indictments.
But a couple of opinion polls, taken well before this week's result, suggest Mamdani is rating in the mid-30s – enough to win a first-past-the-post encounter.
Mamdani's challenger will win the fundraising battle, and also perhaps the political argument. What remains unclear is whether they can match Mamdani in proposing punchy policies to assuage New Yorkers' cost of living concerns.
'The centrist candidate has to present himself as having some of the same authenticity that Mandami was able to present,' Cohen says.
'I think the Democrats nationally should learn from that freshness, youth and the direct communication. But the ideological content of it is probably not as attractive as Mandani might think it is.'