Land supply is fixed but land supply isn’t the problem with rising rent. The problem is the number of flats. Toyko’s rents didn’t rise in the last decades but rents in a place like San Fransico rise because the government enforcing zoning regulations that prevent the building of new housing.
That could be because Japan’s population and economy aren’t growing much. In any case, even if rent isn’t a good example, there might be other bottlenecks in the economy besides labor, so labor won’t always win.
Tokyo’s population and economy are growing even when that’s not true for Japan on the whole. The political decision to get rid of zoning regulations is quite clearly responsible.
Of course, there are resources that are scarce and then the market puts a high price on it but there’s no way around scarcity. If the resource is really scarce you can’t give it to everybody.
...Which amounts to fixed supply. Not sure how you’re contradicting anything I’m saying. The point isn’t about land, the point is that there’s no law of economics saying the price of labor must go up relative to other goods.
Land supply is fixed but land supply isn’t the problem with rising rent. The problem is the number of flats. Toyko’s rents didn’t rise in the last decades but rents in a place like San Fransico rise because the government enforcing zoning regulations that prevent the building of new housing.
That could be because Japan’s population and economy aren’t growing much. In any case, even if rent isn’t a good example, there might be other bottlenecks in the economy besides labor, so labor won’t always win.
Tokyo’s population and economy are growing even when that’s not true for Japan on the whole. The political decision to get rid of zoning regulations is quite clearly responsible.
Of course, there are resources that are scarce and then the market puts a high price on it but there’s no way around scarcity. If the resource is really scarce you can’t give it to everybody.
Tokyo’s population has grown and is growing, but that seems to account for most of Tokyo’s economic growth, not zoning regulations, since Tokyo’s GDP per capita shows fairly anaemic growth from 2001 to 2012 (can’t immediately find a longer time series).
I didn’t want to argue that the lack of zoning regulations produced economic growth but that rent is stable despite grows.
Ah, OK, I read your “political decision [...] is quite clearly responsible” as referring to your previous sentence, not your previous comment.
...Which amounts to fixed supply. Not sure how you’re contradicting anything I’m saying. The point isn’t about land, the point is that there’s no law of economics saying the price of labor must go up relative to other goods.