Why Zohran Mamdani Is Unlikely to Make Groceries Cheaper

The Atlantic

6 days ago

Can the city of New York sell groceries more cheaply than the private sector? The mayoral candidate Zohran Mamdani thinks so. He wants to start five city-owned stores that will be 'focused on keeping prices low' rather than making a profit—what he calls a 'public option' for groceries. His proposal calls for opening stores on city land so that they can forgo paying rent or property taxes.
Skeptics have focused on economic obstacles to the plan. Grocers have industry expertise that New York City lacks; they benefit from scale; and they run on thin profit margins, estimated at just 1 to 3 percent, leaving little room for additional savings. Less discussed, though no less formidable, is a political obstacle for Mamdani: The self-described democratic socialist's promise to lower grocery prices and, more generally, 'lower the cost of living for working class New Yorkers' will be undermined by other policies that he or his coalition favors that would raise costs. No one should trust that 'there's far more efficiency to be had in our public sector,' as he says of his grocery-store proposal, until he explains how he would resolve those conflicts.
Mamdani's desire to reduce grocery prices for New Yorkers is undercut most glaringly by the labor policies that he champions. Labor is the largest fixed cost for grocery stores. Right now grocery-store chains with lots of New York locations, such as Stop & Shop and Key Food, advertise entry-level positions at or near the city's minimum wage of $16.50 an hour. Mamdani has proposed to almost double the minimum wage in New York City to $30 an hour by 2030; after that, additional increases would be indexed to inflation or productivity growth, whichever is higher. Perhaps existing grocery workers are underpaid; perhaps workers at city-run stores should make $30 an hour too. Yet a wage increase would all but guarantee more expensive groceries. Voters deserve to know whether he'll prioritize cheaper groceries or better-paid workers. (I wrote to Mamdani's campaign about this trade-off, and others noted below, but got no reply.)
In the New York State assembly, Mamdani has co-sponsored legislation to expand family-leave benefits so that they extend to workers who have an abortion, a miscarriage, or a stillbirth. The official platform of the Democratic Socialists of America, which endorsed Mamdani, calls for 'a four-day, 32-hour work week with no reduction in wages or benefits' for all workers. Unions, another source of Mamdani support, regularly lobby for more generous worker benefits. Extending such benefits to grocery-store employees would raise costs that, again, usually get passed on to consumers. Perhaps Mamdani intends to break with his own past stances and members of his coalition, in keeping with his goal of focusing on low prices. But if that's a path that he intends to take, he hasn't said so.
City-run grocery stores would purchase massive amounts of food and other consumer goods from wholesalers. New York City already prioritizes goals other than cost-cutting when it procures food for municipal purposes; it signed a pledge in 2021 to reduce greenhouse-gas emissions associated with food that it serves, and Mayor Eric Adams signed executive orders in 2022 that committed the city to considering 'local economies, environmental sustainability, valued workforce, animal welfare, and nutrition' in its food procurement. Such initiatives inevitably raise costs.
Mamdani could favor exempting city-run groceries from these kinds of obligations. But would he? Batul Hassan, a member of the Democratic Socialists of America steering committee and a supporter of Mamdani, co-authored an article arguing that city-run stores should procure food from vendors that prioritize a whole host of goods: 'worker dignity and safety, animal welfare, community economic benefit and local sourcing, impacts to the environment, and health and nutrition, including emphasizing culturally appropriate, well-balanced and plant-based diets,' in addition to 'suppliers from marginalized backgrounds and non-corporate supply chains, including small, diversified family farms, immigrants and people of color, new and emerging consumer brands, and farmer and employee owned cooperatives.' If one milk brand is cheaper but has much bigger environmental externalities or is owned by a large corporation, will a city-run store carry it or a pricier but greener, smaller brand?
Mamdani has said in the past that he supports the BDS (boycott, divestment, sanctions) movement, which advocates for boycotting products from Israel. That probably wouldn't raise costs much by itself. And Mamdani told Politico in April that BDS wouldn't be his focus as mayor. But a general practice of avoiding goods because of their national origin, or a labor dispute between a supplier and its workers, or any number of other controversies, could raise costs. When asked about BDS in the Politico interview, Mamdani also said, 'We have to use every tool that is at people's disposal to ensure that equality is not simply a hope, but a reality.' Would Mamdani prioritize low prices in all cases or sometimes prioritize the power of boycotts or related pressure tactics to effect social change? Again, he should clarify how he would resolve such trade-offs.
Finally, shoplifting has surged in New York in recent years. Many privately owned grocery stores hire security guards, use video surveillance, call police on shoplifters, and urge that shoplifters be prosecuted. Democratic socialists generally favor less policing and surveilling. If the security strategy that's best for the bottom line comes into conflict with progressive values, what will Mamdani prioritize?
This problem isn't unique to Mamdani. Officials in progressive jurisdictions across the country have added to the cost of public-sector initiatives by imposing what The New York Times 's Ezra Klein has characterized as an 'avalanche of well-meaning rules and standards.' For example, many progressives say they want to fund affordable housing, but rather than focus on minimizing costs per unit to house as many people as possible, they mandate other goals, such as giving locals a lengthy process for comment, prioritizing bids from small or minority-owned businesses, requiring union labor, and instituting project reviews to meet the needs of people with disabilities. Each extra step relates to a real good. But once you add them up, affordability is no longer possible, and fewer people end up housed.
Policies that raise costs are not necessarily morally or practically inferior to policies that lower costs; low prices are one good among many. But if the whole point of city-owned grocery stores is to offer lower prices, Mamdani will likely need to jettison other goods that he and his supporters value, and be willing to withstand political pressure from allies. Voters deserve to know how Mamdani will resolve the conflicts that will inevitably arise. So far, he isn't saying.