Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

[flintlock]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

I have the final say on the compensation for each and every single one of my 165 employees. Two years ago none of these jobs existed. We've done something a bit unique...8 years ago we pursued a geological idea and ended up building a mine in a place where no other mines exists. None of these operating jobs existed 2 years ago. We are the largest single employer in the region and the largest taxpayer to the regional government. It's my job to advance the interests of my company. None of the other so-called "stakeholders" are going to do that, are they? Because they are quite naturally advancing their interests. Welcome to the real world :-)

You couldn't comment on her views because you made no apparent effort to hear them. Once again, this forum would be better served if people spent less time judging Reinhart and more effort judging the case she was trying to make.

And IF you paid them $2 day, in developed countries like Australia, the taxpayers will ultimately be forced to chip in the other $12 hour or so worth of welfare benefits, healthcare, retirement, etc to make up the shortfall. Bringing in $2 day immigrants to work in Australia probably results indirectly in a transference of wealth from the taxpayer/treasury to the mine owners. AKA corporate welfare. This is what people have a real problem with, not "free enterprise". Its a shell game with the TRUE costs of employment. The real costs get shoved off on the taxpayer. A similar scam was worked with the banks. Privatize profits, socialize debt. Hence the US $16 trillion debt. Now if these people signed off on all welfare benefits, and they were just allowed to die where they dropped, the lady might have a better argument. But we know that never happens. And she knows it. And she knows she can let the STATE deal with them when they become a problem.

Now if what she really means is the labor costs are too high for the industry, then she should just say that.

[flintlock]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

I agree completely! Totally irrelevant what she makes. I think what most find offensive is that first line beneath the video. While she probably meant nobody is too good to work at any wage if that is all there is, the caption didn't exactly win her any friends. Billionaires rarely win popularity contests, and this lady didn't help herself any with that. Not that she cares, or should.

Perhaps also, people resent being given life advice from an heiress, who didn't exactly ever have to take her own advice. It's one thing to tell people to work for $2 day. It's another to actually do it.

I don't find criticism of Rinehart's statement and your point GRG to be mutually exclusive. I think both are valid. Perhaps Australian mining labor costs are out of hand. But her statement showed a lack of tact at best. Luckily Mining companies don't need to have a popular image, like Coca-Cola or Home Depot!

[flintlock]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Funny how nobody really ever addresses how to actually lower medical costs. They want to price fix. But nobody wants to actually make the system more efficient. Labor is NOT the only way to make a business more efficient and hence more profitable. My business professor always used to stress that and I agree. And besides, I'll take one good employee at $25 hour over two at $15 any day. Its when businesses start looking at employees as robots who all produce exactly the same number of widgets that things usually fall apart in the productivity department. If paid based on seniority, rating, etc, People figure out really quick the lowest common denominator of work required just to get by. But healthcare inefficiency goes way beyond labor productivity, and way beyond the scope of this thread!

[astonas]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

I agree completely! Totally irrelevant what she makes. I think what most find offensive is that first line beneath the video. While she probably meant nobody is too good to work at any wage if that is all there is, the caption didn't exactly win her any friends. Billionaires rarely win popularity contests, and this lady didn't help herself any with that. Not that she cares, or should.

Perhaps also, people resent being given life advice from an heiress, who didn't exactly ever have to take her own advice. It's one thing to tell people to work for $2 day. It's another to actually do it.

I don't find criticism of Rinehart's statement and your point GRG to be mutually exclusive. I think both are valid. Perhaps Australian mining labor costs are out of hand. But her statement showed a lack of tact at best. Luckily Mining companies don't need to have a popular image, like Coca-Cola or Home Depot!

I'm in broad agreement here. My main concern in this regards the way any discussion of a more progressive tax structure qualifies as "Class Warfare", while longstanding discussions of wage or benefit reductions, austerity, safety-net eliminations, etc. are purported to not fall into that category. I hold both to be part of a very active and long-running class war, currently in effect. All of the above do, after all, redistribute assets between classes.

And that's why I find it silly that people shout objections to "class warfare" whenever progressive taxation is brought up. These same objectors are often benefitting from that exact same war while they make the objection. Denying the existence of a class war simply makes it easier to win it.

The issue is not her concerns (which, as far as I am concerned, might well be valid). The issue is the hypocrisy inherent in her framing of the discussion.

[doom&gloom]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

I didn't see anything in the article that was posted where she says she wants Australians to work for $2.00 a day. And I have seen the excerpted clip on the BBC where she makes the point that some African miners work for $2.00 a day (although those miners at Lonmin in South Africa look set to maybe change that too) but once again I didn't hear her say that Australian miners should work for that wage. Do you have a link or something where she actually said this?

Before all you folks knee jerk and colour the message because of her personal wealth, maybe you should check out the cost structure in the Australian mining industry. I run a company with very strong Oz links but the assets are in Central Asia. I had a need for some mining engineering consulting work and because of our ties to Perth started my search in that large talent pool...$2600 per day plus expenses plus business class shuttle flights plus, plus, plus. Beyond anything I can rationalize or afford...especially since I don't pay myself anywhere near that much (never have) and I have my own money on the line. A few weeks ago one of my shareholders was telling me about his teenage son who is working as a security guard at a BHP mine in Western Australia...$110k a year with a high school diploma. BHP subsidizes the teachers in some of towns where they don't operate fly-in/fly-out because if they don't the teachers all quit and go to work at much higher wages in the mines, and then BHP has difficulty getting families to relocate because the schools are so bad.

Love her, or hate her Gina has a point. Commodity industries don't control the price of their fungible products...and those prices are notoriously cyclical. And that means unlike say an auto manufacturer that can differentiate its product across a range of prices and margins, commodity producers have only one strategy they can follow...low cost, low cost, low cost. And when the inevitable cyclical downturn hits, the low cost producer is the one that survives. Australia's high cost structure (not just wages, but everything combined) has driven some of the highest levels of automation and productivity related capex investment anywhere in the world. But when (not if!!) base commodity prices go into a deep cyclical downturn the mining states in Australia might be in for a tough haul, and the layoff statistics will tell the story. Until then, party on...

#1 son is considering a career in mining engineering (at my suggestion). He has one year of HS to go. I have been in contact with a former US prof in the field who now teaches in OZ (Adeliade). He tells me how expensive stuff is there compared to living in the US and my head just spins. If the bottom ever falls out of resources there, OZ is gonna collapse big time. It'll make the US situation look downright rosy in comparison. OZ seems like a bubble waiting to be pricked one day by a resource crash.

[flintlock]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

I see it all as a game, or struggle. Labor is doing their best to get the most for themselves out of Management. Management is doing their best to get the most out of Labor. What's the problem? Why can't Labor try to get ahead? But for some reason, any attempt by labor to work for its own best interests is classified as class warfare. I don't deny Class Warfare exists, but rather feel its a two way street, being used by both when convenient. Management tries to portray Labor as selfish, lazy, and overpaid. Sounds a lot like what Labor calls management.

[flintlock]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

#1 son is considering a career in mining engineering (at my suggestion). He has one year of HS to go. I have been in contact with a former US prof in the field who now teaches in OZ (Adeliade). He tells me how expensive stuff is there compared to living in the US and my head just spins. If the bottom ever falls out of resources there, OZ is gonna collapse big time. It'll make the US situation look downright rosy in comparison. OZ seems like a bubble waiting to be pricked one day by a resource crash.

Is this phenomena that different from any boomtown mining area? I remember reading about insane housing costs in Montana I think it was. Don't energy producing areas tend to boom and bust a lot anyway? Texas in the 80s?

[doom&gloom]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Is this phenomena that different from any boomtown mining area? I remember reading about insane housing costs in Montana I think it was. Don't energy producing areas tend to boom and bust a lot anyway? Texas in the 80s?

Unfortunately we are not talking abot a small town, we are talking about a LOT of OZ that is tied to mining. all the inflated home prices, inflated restaurant prices, etc -- much of this is 'trickle down' from the resource sector. Remember you are not tallkining about a big, divirsified country like the US there.

[flintlock]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

The Texas economy is larger than Australia's. I seem to remember when in parts of TX you couldn't give a house away. There
WAS a time Oil was huge in TX. But I get your point.

[nedtheguy]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

redacted

[lakedaemonian]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

d&g, you aren't the only one. There still is a considerable amount of hubris here in the lucky country. The mining industry has been keeping the country afloat and is what helped Australia ride the rocky patches of the GFC (AFC in EJ terminology) in 2007-2008. I don't know anything about the mining industry, but I don't think that the two charts in this article can be a good sign (tried to paste as images, but it bumped me back - probably better to read the article context): http://www.macrobusiness.com.au/2012...n-ore-squeeze/

This one about coal price doesn't sound too hot either: http://www.macrobusiness.com.au/2012...falls-heavily/

And to post yet another article from the MacroBusiness site, one I find that gives a good counterbalance to the "mining and housing goes up forever" bullhorn media sites, the video on here is good:
http://www.macrobusiness.com.au/2012...ered-on-china/

The PM essentially saying not to worry - China will keep on building and building. Huh?? The end part of the video also gives a clear message - "Australia doesn't seem to be listening to what China is saying." That's mainly how I feel about the situation here. While I don't know the iron or coal market or what the future holds for commodities, I can tell you that the housing market is still extremely overvalued and that I think the reason why everything is so expensive here flows on from that. Australia does have a very low public external debt, but extremely high levels of private debt. Steve Keen is the guy to go to on that. Right now, the housing market is softening again, especially in Melbourne. Seems to be a tight job market now in Sydney, especially in the financial sector. My gut feeling for the Oz dollar is that there is still a lot of hot money here for the yields and resources. All signs are pointing to another rate cut in October to try and get the economy and housing going again, so that probably won't help the dollar. Note to EJ - we still haven't came near $1.10 yet, so we're still ahead: http://www.itulip.com/forums/showthr...439#post214439

Retail is still getting killed as people have figured out it's much cheaper to buy on the internet from overseas with the strong dollar. I think a lot of the reason retailers can't compete is due to the high rents they have to pay. And from a fundamental standpoint, I just don't see how families can afford a 2 bedroom flat, let alone a house. While I can't see how the the finances stack up, it's still a nice, stable society here. We've got beaches, friendly people, cold (expensive) beer, and the nice weather, so I'm not complaining and enjoying the good times. I still feel in ten years, though, we'll look back at this as a what were we thinking? moment: http://www.news.com.au/business/auss...-1226452397755

I'm thinking much the same.

I'm in NZ and I get over to Australia on average 4 times a year and to the US 2-3 times a year.

I'm in Brisbane in a few weeks immediately followed by a trip to the US, including to parts of Florida.

Earlier this year when I was on the Gold Coast as well as in Florida I was stunned at the differential in prices both big(real estate) and small(draft beer).

A single decent Australian house in Brizzie/Gold Coast can be exchanged for roughly 3 equivalent homes in Florida(roughly comparable home/climate/amenities).......the same very rough rule seemed to apply with draft beer as well!

I'm looking forward to testing out those ratios again shortly.

It does leave me with a rather considerable ominous feeling at the moment.....but in having said that.....locally.....the foreseeable future for us(really only 6+ months visibility) looks better than any in the last 3+ years.

Weird.

[touchring]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

We've got beaches, friendly people, cold (expensive) beer, and the nice weather, so I'm not complaining and enjoying the good times. I still feel in ten years, though, we'll look back at this as a what were we thinking? moment: http://www.news.com.au/business/auss...-1226452397755

For Australian and Canadian citizens, even if the property/financial bubble bursts, there will still be a social safety net, but the same cannot be said of many Asian countries experiencing the same.

[gwynedd1]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

I didn't see anything in the article that was posted where she says she wants Australians to work for $2.00 a day. And I have seen the excerpted clip on the BBC where she makes the point that some African miners work for $2.00 a day (although those miners at Lonmin in South Africa look set to maybe change that too) but once again I didn't hear her say that Australian miners should work for that wage. Do you have a link or something where she actually said this?

Before all you folks knee jerk and colour the message because of her personal wealth, maybe you should check out the cost structure in the Australian mining industry. I run a company with very strong Oz links but the assets are in Central Asia. I had a need for some mining engineering consulting work and because of our ties to Perth started my search in that large talent pool...$2600 per day plus expenses plus business class shuttle flights plus, plus, plus. Beyond anything I can rationalize or afford...especially since I don't pay myself anywhere near that much (never have) and I have my own money on the line. A few weeks ago one of my shareholders was telling me about his teenage son who is working as a security guard at a BHP mine in Western Australia...$110k a year with a high school diploma. BHP subsidizes the teachers in some of towns where they don't operate fly-in/fly-out because if they don't the teachers all quit and go to work at much higher wages in the mines, and then BHP has difficulty getting families to relocate because the schools are so bad.

Love her, or hate her Gina has a point. Commodity industries don't control the price of their fungible products...and those prices are notoriously cyclical. And that means unlike say an auto manufacturer that can differentiate its product across a range of prices and margins, commodity producers have only one strategy they can follow...low cost, low cost, low cost. And when the inevitable cyclical downturn hits, the low cost producer is the one that survives. Australia's high cost structure (not just wages, but everything combined) has driven some of the highest levels of automation and productivity related capex investment anywhere in the world. But when (not if!!) base commodity prices go into a deep cyclical downturn the mining states in Australia might be in for a tough haul, and the layoff statistics will tell the story. Until then, party on...

The cost structure is higher in Australia because of other real estate and finance rentiers who collect wealth from land ownership same as her. So its kind of a tough spot from one rentier to another isn't it? I might work for less if I didn't have to pay a big ground rent and then so might the bus driver or doctor that I have to pay and so I could even work for less than that. However in a society that pays people for planting flags and charging access fees, its get expensive.

[nedtheguy]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

redacted

[lakedaemonian]

Re: Class Warfare Continues: Gina Rinehart Calls for Australian Wage Cuts

Anyway, I'm looking into homebrewing now as summer is coming on to save some $$$ and have some fun. The craft beer market here is growing rapidly, but pints of beer at my favorite brewpub are $9.50! Even the more commercial beers tend to run about $7-8 a pint.

http://www.williamswarn.com/

You need one of THESE mate!

I've been mulling over buying one.....for a bit of fun and to build a bit more on the social side of a business I own.

They are due to release/launch version 2.0 shortly

A couple of nice guys....support NZ manufacturing and our horrific trade imbalance!


So, compared to the last time I was back in the US a few months ago, I think the beer price ratio is probably about 2.5:1 to the US? Let me know what you find out.

Will do!

I'm going to be kinda busy shoving 10 pounds of manure in the proverbial 5 pound bag on both trips, but I'm certainly going to try to do a comparison on both real estate and beer.