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| Wednesday, November 16, 2011 |
| The $200,000-a-Year Mine Worker |
 The Wall Street Journal article The $200,000-a-Year Mine Worker reports that those willing to work in dangerous, isolated, and difficult conditions can earn large amounts of money in Australia. The article profiles James Dinnison who is enjoying the lifestyle his hefty paychecks purchase but does not see much need to save for tomorrow. One of the fastest-growing costs in the global mining industry are workers like James Dinnison: the 25-year-old high-school dropout from Western Australia makes $200,000 a year running drills in underground mines to extract gold and other minerals.
The heavily tattooed Mr. Dinnison, who started in the mines seven years ago earning $100,000, owns a sky-blue 2009 Chevy Ute, which cost $55,000 before a $16,000 engine enhancement, and a $44,000 custom motorcycle. The price tag on his chihuahua, Dexter, which yaps at his feet: $1,200.
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"It's a historical shortage," says Sigurd Mareels, director of global mining for research firm McKinsey & Co. Not just in Australia, but around the world. In Canada, example, the Mining Industry Council foresees a shortfall of 60,000 to 90,000 workers by 2017. Peru must find 40,000 new miners by the end of the decade.
Behind this need for mine workers is a construction boom in China and other emerging economies that has ramped up the demand for iron ore, used to make steel, and other metals used in construction, such as copper, typically used for wiring buildings.
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Mr. Dinnison went into mining solely for the pay. While in high school, he said, he broke somebody's skull and teeth "in a bar fight that I deeply regret and have never repeated". He said the judge in his case told him that he could spend a year in prison or pay a $10,000 fine plus $16,000 compensation for the victim. "I needed the money, so I went to the mines," he said.
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Despite having earned roughly US$1 million since he started, he has no savings and doesn't apologize. "The mines are so dull, that when you get back here, everything is stimulation and excitement," he said. "The money I spend supports other businesses because of the [stuff] I blow it on."
Mr. Dinnison proudly calls himself a Cub—a Cashed-up Bogan, a bogan referring to Australian slang for an uneducated blue-collar worker. Books and documentaries are coming out about this group, exploring the country's unease with the thought that conspicuous consumption by undereducated people is what is helping to keep the country afloat.
[...]
Mr. Dinnison hopes to be promoted to another underground job paying $1,400 a day, up from $800 a day. Lina Mitchell, his 28-year-old fiancée, said she is committed to teaching Mr. Dinnison how to manage his money. "The miners will spend the money on cars, bikes, parties," she said. Mr. Dinnison, meanwhile, said he is committed to mining. "I'm qualified enough now that I'll always have a job," he said. "Without mining, I'd be an auto mechanic making $600 a week. I love mining, mate." Ah to be young and never having heard of commodity boom and bust cycles...Labels: Money Stories |
| posted by Boston Gal @ 7:55 AM *
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| 9 Comments: |
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I didn't read the full article, but it reminds me of the professional athletes who think the job (and money) will always be there.
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Thanks to compulsory superannuation in Australia his employers have been putting at least 9% of his salary into a retirement fund for him all this time...
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One of the reasons these mine jobs pay so spectacularly is the very real possibility of getting killed every time one ventures into a mine. There are also health hazards for those who live. I think the expectation is that mine workers will work as short a time as they can to fully retire or to move to a safer, lower-paying profession. Too bad this fellow didn't get the memo. With a little aggressive saving, he could have been one of those lucky few who retire in their 30s or 40s.
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Unrelated to the story.
Hi, Boston Gal
Do you remember if, when Amazon has done its CoinStar promo, was that one-to-a-customer?
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The Coinstar deal was one per person. I have not seen the deal this year for Amazon.com dollars which is kind of sad. I really liked that deal (cash in $40 worth of coins for Amazon.com certificate, mail in form, and get $10 Amazon.com certificate via email).
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In the current climate there is no incentive to save the money. I recently did some calculations and the results are very much frustrating, to be brutally honest. Have a look yourself - they are all published.
If you invest $ 40, 000 a year over 35 years, at modest inflation rate of 2% and administration fee of 1-2% you need stock market to perform at 4% just to preserve value of your money and higher to gain anything.
This means that you are only preserving money you are investing at a very high risk. So it is just plain wisdom - is there a point to be frugal and try to save, if you ended up loosing money?
Feeding financial industry or living your life in full now?
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I work in the mining industry in Western Australia and sadly this attitude is hugely prevalent. So many people join the industry with a "5 year plan" to pay off their mortgage and end up spending it all on cars, boats and motorbikes. Then they're stuck needing the high paying job just to stay afloat. This guy's young, but give him 5 more years and he'll be sick of fly-in-fly-out but not have any choice but to keep going. There's a massive difference between being high income and being wealthy - people think they're wealthy on these incomes but during the bust cycles (which are inevitable) they quickly find out that when the income dries up they've got nothing. On the other hand, I paid off my mortgage instead of blowing all the money on crap; people might shake their head at my crappy car, clothes from target and generally modest lifestyle; but I'm happy and I paid off my house outright at the age of 30 :)
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I work with students (in Australia) doing a lot of careers advising and employment consulting /retraining. I get 2 or 3 enquires about entering the mining industry every week frome people all over the state. A lot of enquiries come from women and young people. The amounts of money they make is staggering but it's a dangerous job.
I've lived and worked in a mining town and sadly the attitude to money is as described in the article. My partner was a loans officer and miners would come in to borrow money for Christmas presents!
not all, but a lot just think they'll always have the money coming in.
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Where art thou BostonGal?
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I didn't read the full article, but it reminds me of the professional athletes who think the job (and money) will always be there.