Zohran Mamdani is taking office in less than two weeks, and one of his big ideas is to bulldoze the free market by opening grocery stores that are owned and operated by the city. It's an undertaking that attracts applause from some lefty New Yorkers, but even the Washington Post has warned that versions of the scheme have "failed elsewhere."
When the government steers grocery carts, a head-on collision with economic reality is inevitable.
Government-run grocery stores mean City Hall's calling the shots on everything from pricing to inventory. That will include picking and choosing what food is sold and putting in place a strategy to source the products. And that's on top of twisting themselves into knots to placate labor unions when hiring workers. Will employees also get paid Mamdani's proposed $30 minimum wage?
If so, it's tough to imagine food prices at "Mamdani-Marts" beating the prices of other Big Apple grocers—that is, without the generous help of taxpayers.
Private supermarket chains keep costs down by taking advantage of economies of scale and tapping into complex supply chains—benefits that cumbersome government-run grocery stores will not enjoy. And if you think private food retailers are taking consumers for a ride with high prices in order to pocket bigger profits, think again. Average profit margins at supermarkets amount to about 2 percent.
The only way this scheme will offer New Yorkers cheaper food is if they themselves subsidize the cost of milk or a bundle of bananas. Taxpayers in Kansas City, for example, have shelled out nearly $29 million to keep a government-run grocery store afloat. To what end? It shut down for good earlier this year, with the mayor saying, "There's always a limit to what we will invest."
Recommended
Fortunately for New Yorkers, this communist fantasy is far from a done deal. Not only must the proposal be approved by the City Council, but the funding mechanism would also need the support of the state legislature. Expect local bodega owners and their employees—as well as smart consumers—to give their elected leaders an earful when it comes up for debate.
Short of a city-run grocery store, some Americans are already discovering the bitter taste of government-managed food supply chains.
A recent food ban in California is a prime example. To appease the "Veganism for All" crowd, the Golden State has outlawed the sale of affordably-priced eggs and pork at grocery stores—leaving expensive specialty products as the only option. As a result, bacon is 50 percent more expensive in San Francisco compared to the rest of the country.
This is a case study of what can happen when the government micromanages even a very small fraction of the thousands of food products sold at supermarkets. Imagine the inflationary problems that would unfold when this level of control extends to everything, ranging from fruits and vegetables to cereal. Spoiler alert: In New York's case, taxpayers would have a big food bill to cover.
As Mamdani is set to take office next month, his grocery store takeover is meeting stiff resistance—and for good reason. From failed city-run supermarkets in the Midwest to the price shocks triggered by West Coast food bans, we've already seen how these top-down experiments end. New Yorkers don't need to star in a sequel.
Jack Hubbard is the executive director of the Center for the Environment and Welfare.
Editor’s Note: Do you enjoy Townhall’s conservative reporting and opinion? Support our work by joining Townhall VIP! Use the promo code FIGHT to get 60% off your VIP membership!
Join the conversation as a VIP Member