Mamdani is benefiting from New York City's changing workforce

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Is the city that defines modern capitalism really about to elect a self-described democratic socialist as mayor? If the answer turns out to be yes, as seems likely, then the explanation may lie in New York City's evolving economy, which now includes fewer hard-charging Wall Street capitalists and more people who work in care services, government, creative industries and the non-profit world.

This poses a dilemma for the leading candidate for mayor, Zohran Mamdani.(1)He is promising a slew of benefits - free bus rides, child care, subsidized grocery stores - and has seized on the affordability crisis in housing, promising no rent increases of stabilized rental units in the city for four years. To pay for all this, he is counting on high earners, but Wall Street is a shrinking share of the city's employment base. JP Morgan has more employees in Texas than in New York.

The other big change in the city is the decline in the number of families. The share of single-generation households has increased from 27% in 2000 to 34% in 2025. This is not necessarily because New York has young transients who live in the city in their 20s and then form families elsewhere. New York has also gotten much older. About 29% of New Yorkers were over age 60 in 2025, compared to 23% in 2000. The share of 20-somethings fell from 21% to 17%.

Of course, this is part of a larger shift: Nationally, there are more people working in education, health care and social services, and there are also more single-family households and an aging population. But these trends have been more pronounced in New York City and have bigger implications, both for the city's quality of life and its voting patterns.

The city has a limited supply of housing in part because of restrictions on building, but also because a large share of its housing (about 1 million units) is under some form of rent stabilization. This means less turnover in the housing market, which further lowers the vacancy rate, which drives up costs. In addition, this system encourages parents to hold on to larger apartments even after their children grow up and move out, while younger people looking to rent must pay market rates.

When you have limited housing, and a growing population with a larger share of relatively low earners, affordability becomes an even bigger issue - especially when there remains a sizable population that can pay much more. The changing nature of the workforce also means there are probably more people who both provide and rely on services and benefits from the government and care industry.

None of this is financially sustainable. The services create even more jobs in the government and care sector, but they need to be paid for. There is limited appetite to increase taxes on anyone but the highest earners; Mamdani plans a flat 2% tax on anyone who earns more than $1 million, as well as higher corporate taxes. In fact, corporate taxes are largely borne by workers, and rent stabilization is a form of a tax borne by anyone who rents a market-rate apartment.

When it comes to tax revenue, however, the city is becoming even more dependent on people who earn high wages. So far, the financial sector is a shrinking but still significant share of the economy. But its future in New York is at risk as other states woo the financial industry and have lower taxes.

The changing demographics also shift the politics. New York City is both more expensive than it used to be and has more people who find it unaffordable. Many of them find promises of price controls appealing - even if the solution will ultimately make the problem worse. The promise of more services also sounds compelling, especially if it seems someone else will pay for it.

The problem is that, sooner or later, in one form or another, everyone ends up paying. - - - (1) Former Mayor Michael R. Bloomberg, the founder and majority owner of Bloomberg LP, has endorsed Mamdani's opponent, Andrew Cuomo.