Dollars, Sense, and the 2025 Mayoral Election: Affordability, Tax Policy, and the Future of New York
Post-Covid economic forces have a lot to do with shaping the issues resonating with voters in New York City’s 2025 Mayoral contest. Affordability, after all, is a function of costs and incomes. The cost of housing and child care, the two biggest costs for families with young children, rising faster than wages creates an affordability squeeze.
This report examines economic trends over the past five years that have not been favorable for most New Yorkers.
Real median incomes have fallen, poverty and child poverty have risen, economic hardships have grown, income growth has been concentrated at the top, and income disparities have resumed widening after a leveling-off in the half-dozen pre-Covid years. Outmigration from New York City since the onset of Covid-19 has been concentrated among middle- and low-income households, with affordability challenges likely a significant push factor.
Just as concern about rising income inequality played an important role in the 2013 New York City mayoral race (recall Bill de Blasio’s “Tale of Two Cities”) Zohran Mamdani, the Democratic candidate for New York City mayor, has made affordability the centerpiece of his campaign platform. Mamdani has proposed, among other policies, boosting the minimum wage and raising New York City income taxes on millionaires by two percentage points to finance universal child care. The new report examines the minimum wage and millionaire tax proposals.
The doubling of the minimum wage 2014-19 contributed to the city’s strong employment growth, and fostered the strongest wage and income growth for the bottom half of city families since the 1960s. Poverty declined and income polarization stabilized for the first time since the 1970s. However, the 2016 state minimum wage increase was not indexed to keep pace with consumer inflation and since 2019, New York City’s minimum wage has fallen behind several other large cities.
While raising taxes on the rich is always hotly contested in New York City, what’s different about this moment, however, is that these taxpayers recently benefitted significantly from Federal fiscal legislation that was punitive for the economic well-being of many New Yorkers. It also comes in the context of a highly regressive overall local tax structure. Given this backdrop and the adverse trends affecting most New Yorkers, the recent analysis by the Citizens Budget Commission regarding the decline in New York City’s share of national millionaires widely misses the policy mark.