In his first five months in office, New York Mayor Zohran Mamdani has begun delivering on some of his campaign promises to make the city more affordable for its residents. He secured state funding for a free childcare program for 2-year-olds. He appointed board members who could freeze rents on rent-regulated buildings. He redesigned bus routes and unveiled plans to open five city-run grocery stores.
Yet with warning signs flashing about the city’s economy, Mr. Mamdani is facing questions about his larger economic agenda – particularly when it comes to his relationship with the business community and whether he is focused enough on spurring growth.
A minute-long video the democratic socialist mayor posted in April promoting a new pied-à-terre tax on non-primary residences worth more than $5 million drew strong blowback from business leaders. Citadel CEO Ken Griffin, whom Mr. Mamdani singled out in the video, threatened to move his investment firm to Miami. At the same time, Mr. Mamdani’s calls to raise income and corporate taxes have gone nowhere in Albany.
Why We Wrote This
With warning signs flashing about New York City’s economy, Mayor Zohran Mamdani is facing questions about whether he has a plan to spur job creation. If he fails on that front, a lagging recovery could squelch his affordability agenda.
And Mr. Mamdani has yet to appoint a permanent leader to run a key city agency long tasked with promoting job creation by encouraging private investment with tax breaks and other incentives.
Private sector employment in the city still has not rebounded to prepandemic levels, and unemployment is higher than the national average. Companies announced thousands of layoffs last year and are warning of more to come, as artificial intelligence is widely adopted.
Mamdani aides say the mayor understands he will need to work with the business community to tackle the city’s problems. Making New York more affordable for working people means not only finding ways to lower costs but also creating better-paying jobs and growing the city’s tax base. If he fails on that front, New York’s lagging recovery could effectively squelch his entire agenda.
“This is an all-hands-on-deck moment,” says Julie Su, the city’s first-ever deputy mayor for economic justice, in an interview. “In order to tackle the challenges New York City has faced for a long time, including affordability, everybody who loves the city is a partner in that work.”
Many of the headwinds New York is facing are due to forces outside of Mr. Mamdani’s control. As mayor, he has no influence over things like interest rates, tariffs, or immigration policy. Most of the big tax increases he has advocated for are in the hands of the governor and state legislators. Still, there are steps Mr. Mamdani can take that could have a significant impact on the city’s fiscal health, either positive or negative.
“A mayor can do a lot,” says Steven Fulop, president and CEO of the Partnership for New York City, a business group. “You can have a big impact on how people view where they’re going to grow. People are never going to leave here entirely, but they will make decisions to grow elsewhere.”
Hiring rebounded in New York in the wake of the pandemic, but then slowed in 2025. April’s unemployment rate was 5.6%, higher than the national 4.3% rate.
Several industries have continued to struggle since the pandemic – including manufacturing, food production, trade, and construction. And some of the industries that are growing have seen a rise in lower-paying jobs, such as home health aide positions, which are primarily funded by government spending through Medicaid.
“We have job growth fueled by the government, which is not the healthiest form of job growth,” says Ana Champeny, vice president for research at the Citizens Budget Commission. “Job creation is incredibly important for the city, and the fact that we have stagnant growth, and in some cases declines in some sectors, is very concerning.”
Mamdani officials are hopeful that the summer’s World Cup and America’s 250th celebrations will give a much-needed boost to the hospitality sector, which has lost roughly 4% of its workforce since 2020. They say they are seeking to reverse the economic slowdown by strengthening public infrastructure and attracting businesses by making the city more livable and affordable for employees.
Eduardo Munoz Alvarez/AP
“The fact that growth was in fewer industries was something we saw coming in, and we have to address it,” Deputy Mayor Su tells the Monitor. “It is fundamental to our vision of economic justice that we want there to be strong, robust economic growth and we want that growth to be widely shared.”
One of the key tools that previous mayors have used to shape the city’s economy is the Economic Development Corp., a 500-person nonprofit public authority tasked with encouraging private investment, managing a large real estate portfolio, and running its ferry system. The EDC has played a fundamental role in high-profile developments like Hudson Yards, the new Yankee Stadium, and the High Line.
Right after Mr. Mamdani’s inauguration, his administration circulated a memo saying it planned to expand the EDC’s mission to prioritize economic justice matters, including spearheading new city-run grocery stores that will offer discounted fresh produce, while reevaluating its past approach of offering hefty public subsidies to billionaire-owned development projects.
“We want projects to utilize the city’s tremendous resources to build up communities, not build on top of them,” says Ms. Su, who served as acting secretary of labor under President Joe Biden. “One of those changes is including more community voices and concerns in the projects that EDC leads.”
Lately, business leaders have grown increasingly concerned that the mayor still has not named anyone to run the EDC, five months into his term.
Mr. Mamdani declined to reappoint the EDC’s previous president, Andrew Kimball, who wanted to stay on in the role. His inner circle has received referrals from business associations, but several potential candidates turned down offers while others have not matched up with the administration’s vision for the role, according to multiple sources. City officials say they are wrapping up their search and will announce a new leader for the agency soon.
Kathy Wylde, a former Partnership for New York City president, says reorienting the EDC around an affordability agenda might be a tall order, given that the agency has historically operated primarily to expedite luxury development projects, with little oversight from the city.
“Its mission involves subsidizing private real estate and corporations, which much of [Mr. Mamdani’s] constituency is suspicious or hostile toward,” she says. “There’s a lot of cynicism toward it.”
Soon, the Mamdani administration might face even larger challenges.
Tech companies with a significant presence in the city, including Cisco, LinkedIn, and Meta, have laid off 142,000 workers so far this year nationwide. Meta, which eliminated 10% of its workforce in May, announced it would close 6,000 open roles and shift another 7,000 employees into artificial intelligence-focused positions.
The cascade of layoffs is in part due to overhiring in the wake of the pandemic and rising interest rates. But the widespread use of AI could lead to even weaker hiring and the disappearance of many entry-level jobs, reverberating through the city’s economy.
City Comptroller Mark Levine has predicted the possibility of thousands of job losses in a short period of time, saying the city must offer unemployment assistance, retraining programs, and incentives for employers to hire young people.
“We are facing potentially profound disruption to employment, our economy, and our budget,” Mr. Levine posted on the social platform X. “The time to start mobilizing is now.”
Julie Samuels, president and CEO of Tech:NYC, which represents the city’s tech industry, says the tech industry is in a “period of experimentation” with AI and that companies are trying to determine which AI tools to use, but will still need to train employees for more senior roles.
“That transitional period from what the jobs look like now to what the jobs look like 10 years from now might be a very messy period,” she says. “It is incumbent on us as New Yorkers that we work with policymakers and academic institutions to ensure that the transition is as smooth as possible.”