Introduction to Zohran Mamdani’s Small Business Policies
Zohran Mamdani’s shock-to-the-establishment victory on election night left the Wall Street and billionaire class reeling, but it could provide a jolt to the small business community. Supporters of Zohran Mamdani point to the mayor-elect of America’s largest city having put out a detailed policy plan for small businesses. Among Mamdani’s small business policy proposals are cutting fines and fees for small businesses in half, including the $1,000 new business registration fee; speeding up permitting and making online applications easier; and a 500% increase in funding, to $25 million, for a city program that gives business owners individualized support.
New York City’s Business Express Service Teams (BEST) directly assist small businesses in applying for permits and complying with regulations. While threats have been made by the wealthy and big business class to abandon New York in the face of higher taxes, Mariano Torras, professor and chair of finance at the Robert B. Willumstad School of Business at Adelphi University on Long Island, says that Mamdani is trying to stem the tide of small businesses leaving the city.
“We have seen a recent exodus of small businesses from NYC, as business owners find themselves priced out by policies that invariably favor large corporations and especially real estate developers,” said Torras. Mamdani’s proposal to turn empty office buildings into mixed-use or retail spaces could also be a positive for small businesses trying to navigate the complex and expensive New York City real estate market.
Impact on Small Businesses
A small business decline could be reversed through these and other policies that make it easier and less expensive to start or maintain a business in New York City, Torras said, specifically pointing to Mamdani’s plans to cut small business fines and fees under the auspices of the small business czar. By the numbers, the picture of small business health is more nuanced, and more positive. There has been post-pandemic growth of local businesses, but it is uneven across the city’s borough, with midtown Manhattan and North Brooklyn leading the way, and the new business formation numbers influenced significantly by growth in sole proprietorships.
Some of Mamdani’s better-known, and more controversial, policies could also serve as an indirect tailwind for small businesses, according to Michelle Bufano, a New York City-based small business consultant, “His proposals to reduce fines, expand affordable transit, and freeze certain rents could help residents and workers by fostering economic stability, which often benefits small businesses that depend on strong local communities,” Bufano said.
Andrew Stern, CEO of New York-based Quilt Software — which helps smaller businesses compete with larger ones — says that small retailers should keep an eye on Mamdani’s proposed rent freeze. “While he’s expressed this is explicitly residential for now, he has also previously shared the importance of stability for tenants across the board,” Stern said, noting that could provide an opening for local retailers to afford to stay in the neighborhoods they started in.
Minimum Wage Concerns
Bufano says the biggest concern she hears from small business owners is about the proposed $30-per-hour minimum wage by 2030, something she says could cause a real headache for some. Bufano points out that pay structures inside most small businesses are tiered, with more experienced workers receiving higher wages. “If wages jump to $30 per hour for entry-level workers, small businesses will have to raise pay across the board to keep the tiered structure in place. And that will add up fast for small businesses,” Bufano said, with many small businesses running on thin margins unable to absorb the cost.
Analysis from Columbia Business School shared on Wednesday morning via email pointed to studies which have struggled to conclusively answer this question. There is a risk of increased worker productivity resulting from higher wages being offset by profit declines, but real estate costs and red tape are also often cited by business owners more frequently than wages as the bigger challenge. Certain sectors would likely be hit harder than others by a higher minimum wage.
Progressive Politics and Small Businesses
The biggest experiment for small businesses in New York and ultimately around the nation, according to Bhaskar Chakravorti, dean of global business at The Fletcher School at Tufts University, will be in pitting reduced costs and entry barriers against higher wages. Mamdani has to prove that lessening the burdens of bureaucracies, licenses, regulatory compliance, and all of the red tape associated with starting and running a small business can be balanced against potentially higher labor costs to produce a net win for the small business, the community and the cities at large.
“Given the complexity and diversity of NYC, this suggests that many other progressive and Democrat-leaning cities will be looking to it closely as a laboratory,” Chakravorti said. Other cities will be looking at whether small business capitalism can be combined with a progressive agenda and if there is a coherent progressive message that can counter the dominant Republican narrative that claims it stands for small business while critics say it actually gives the biggest breaks to the big ones.
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Smart Tip for Readers
To navigate the changing landscape of small business policies under Mamdani’s administration, stay informed about proposed changes to minimum wage, rent freezes, and small business support programs, and consider attending local community meetings or joining small business associations to stay up-to-date on how these policies may impact your business.
