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When Train Drivers Are Paid More Than Surgeons
We last discussed the rise of the robot (as a a replacement for human labor) six months ago, pointing to the implicit (and large) deflationary bust that this entails and nowhere is this more evident today than in Australia's outback. As Bloomberg reports, the 400-plus workers employed by Rio Tinto in the remote Pilbara region (driving train-loads of mined minerals) are the highest-paid train-drivers in the world. The decade-long mining boom down-under has sucked up skilled workers, raising wages for engineers to drivers to an average $224,000 per year - as much as a surgeon in the US. This ridiculous situation has led, unsurprisingly, to the mining companies replacing them with robot locomotives.
Train drivers employed by Rio Tinto Group to haul iron ore across Australia’s outback make about the same money as surgeons in the U.S. It’s little wonder the mining company will replace them with robot locomotives.
The 400-plus workers in the remote Pilbara region who earn about A$240,000 ($224,000) a year probably are the highest-paid train drivers in the world, according to U.K.-based transport historian Christian Wolmar. Australia’s decade-long mining boom has sucked up skilled workers, raising wages for engineers to drivers at Rio, the second-largest exporter of the mineral, and its closest competitors, Vale SA (VALE) and BHP Billiton Ltd.
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“All producers are chasing better margins and stronger returns,” said Chris Drew, an analyst in Sydney with Royal Bank of Canada. “Rio is ahead of the competition in terms of automation of trucks and trains,”
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The pace of automation is picking up as the seaborne market is poised for at least four years of gluts. The price of ore, which rose as much as eightfold in the past decade as China added $6.8 trillion to its gross domestic product, will drop to $80 a ton in 2015, according to a Goldman Sachs Group Inc. forecast. It closed yesterday at $131.40 a ton.
Rio, which last year approved spending of $7.2 billion to expand the iron ore operations, is aiming to have the world’s first, fully automated, long-distance and heavy-haul rail system operating in 2015.
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Rio’s rail, port and truck movements are all watched over from a control center in the Western Australia state capital of Perth, 1,500 kilometers to the southeast, that has about 250 controllers working three shifts a day. The rail automation is part of the company’s push to use technology to improve productivity and safety and wring out extra capacity from existing assets
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Rio also plans to automate about 40 percent of its Pilbara truck fleet by 2016. The goal is to reduce costs to $15.60 a ton by 2020, from $23.10 a ton in the first half of this year
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Each train driver earns about A$240,000 a year, according to Credit Suisse. Surgeons based in the U.S. earned a mean annual wage of $230,540 last year, according to data from the Bureau of Labor Statistics. New York state lawyers on average earned $151,000, according to the data. Rio spokesman Bruce Tobin declined to comment on train drivers’ salaries and the potential cost savings from the company’s automation drive.
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"The position we’ve taken is that you’re never going to win the argument against technology,” said Gary Wood, Western Australia district secretary for the Construction, Forestry, Mining and Energy Union, which covers the drivers. “We’re going to work to be involved the protection of as many jobs as possible as a result of any changes in technology.”
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“Once Rio has cracked it, I wouldn’t expect BHP to be that far behind,”
Is it any wonder this chart continues to diverge...
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How have these ticks been allowed to grow so fat off the blood of the host?
I was once hired to cut an entry door opening and install the door in a persons exterior garage wall for an agreed upon sum of $250 for time and materials. It took me about an hour, as I had performed this same operation countless times in the past. When I finished, the homeowner was pissed as hell because I made $250 in an hour, and by god his landscaper doesn't make that kind of money, etc, etc. to which I replied then perhaps you should have had your landscaper install the fucking door. My actual take home on that job was about $40, and nowhere near the hassle of performing a thankless job for an asshole. I'm certain that neither the train driver nor the surgeon mentioned in this article would care to trade places. It's all about perspective.........
I feel your pain. Prostitutes are well aware of this phenomenon- they are well aware that the value of the services they perform are perceived to drop dramatically immediately after they have been delivered.
Story goes that in the old days when their were TV repairman he got a call to fix a TV. Opened the back and told the customer it would cost $60.05.
Repairman quickly replaced missing screw, TV worked, and asked for his money. Customer says $60.05 for a screw? Repairman says no the screw cost 5 cents. It's $60.00 for knowing where to put the screw.
Dad did that. Old tube guitar amps, too.
Was the same thing in the early days of desktop computers - when they still had a lot of components you could easily replace and motherboards, graphics cards, etc were dear enough that it was worth doing so. Once you got to know a given model was notorious for burning out, say, the +12v regulator on the motherboard, it was 5 minutes of confirming the fault and maybe 10 minutes of fixing it. Usually took longer to take the board out of the case and put it back again after.
This was fine if you took the machine away and fixed it at the bench. Mr. Customer didn't see the work. But if you had to do it on site, you'd ALWAYS get an argument about the initial quote versus the time taken to do the job.
"50 quid! But it only took you twenty minutes! "
...plus the several hundred hours, usually making NO MONEY, it took to learn what the common faults were and how to repair them.
It's better that a train driver gets that sort of pay than for a banker to get it.
+10000000
When the train driver pays 15% income tax on his or her earning, claiming the income was subject to the "carried interest" (and, of course, carried ironore and carrried coal) tax exemption, then we would have a real story.
The Surgeon should and probably would make more if he did not have to support all the mid management administrative types ect. My experience has been that as soon as something gets more efficient by being automated the first thing you see is more administrative types and management being hired which basically cancels out all the technological savings. Then comes more red tape and paperwork to justify such jobs.
I KNEW I shoulda got that engineering degree ...
Mono = one, and rail = rail.
These train 'engineers' do not have engineering degrees. Completely different fields.
Why doesnt Rio Tinto just train some new employees? Is train driving that hard? Surely there is some decent talent available somewhere in Australia that arent happy with their current wages.
You need an engineering degree to drive a train.
No you don't. Engineering degrees have nothing to do with operating trains. They are similar only in name. Even real engineers (not just train "engineers") generally aren't paid this much in Australia.
Why doesnt Rio Tinto just train some new employees? Is train driving that hard? Surely there is some decent talent available somewhere in Australia that arent happy with their current wages.
I'm not sure if you understand, theres a critical shortage of semi-skilled workers in Australia, in Darwin a town of 100,000 people rents are $8,000/mo and theres 30+ pages of help wanted ads in the daily newspaper. And were in a RECESSION here!
http://www.miningaustralia.com.au/news/train-drivers-reject-
http://www.miningaustralia.com.au/news/coal-train-drivers-to-strikebhp-s-pay-offer
Challenges to the jobBut there are disadvantages to working two weeks on, one week off, fly-in fly-out. The big one: being away from home, family and friends.
“I’ve already missed two family weddings because they didn’t coincide with my roster, along with other social gatherings,” Zeb told us.
“When I’m back in Perth I make the most of the time off, go out to dinner, socialise, feed my travel bug.”
Then there’s also the living and working in a pressure cooker environment – working 12 hour days for 14 days straight.
His advice for someone wanting to work on the mines?
“Have yourself a plan or goal,” he said. “Don’t squander the good money on too many ‘boys toys’. Treat yourself but don’t become too extravagant."
“Oh, and don’t get too fat with all the good tucker at the camp.” - See more at: http://www.miningoilgasjobs.com.au/our-blog/november-2011/whats-it-like-...
Because people that are unhappy with their current wages may or may not be trustworthy.
A mine mechanic makes about $1000 per day and is provided free trips home by plane every 3 weeks.
Right up until he's crushed and his wife collects the life insurance.
So what, this is meant to be a free (employment) market.
I suppose Aussies could pull a Clinton and allow 20+million people to bolster the employment markets by giving them all citizenship in one hit. Keeps the corps happy on the employment supply side. Sorry the poorer 50% of workers who build a nation over generations, you will be crushed...
Believe me anyone working up in the Pilbara earns their paycheck that place is extreme.If you look at the profits of the mining majors they can afford to pay well.The flow on effect of big paychecks is gold for positive money velocity.
Exactly, this is yet another spin in favour of consolidation culture. If the money is there, why shouldn't the workers enjoy the good life. It is equivalent to the 18th century put down 'know thy place.' Has modern America eclipsed feudal England for the polarity of its class system?
I should point out that the Hamersley & Robe River private railway, which is part of Rio Tinto, has been using 'robot' locomotives for about 30 years. My late uncle built a lot of the signalling and telecommunications infrastructure for it in the late 70s and 80s. I used to have a HO-gauge model of one of their locos that he gave me when he visited the UK on holiday. Not sure what happened to that, come to think of it.
The consists are often headed and tailed by at least three locomotives each end - sometimes more on long trains. Only two or three of those are generally manned - and that's largely for provision of instant human decision making in an emergency; the locos are perfectly capable of driving themselves, under normal circumstances. The rest are fully automated and autonomously respond to power and braking demands from the driver in the front locomotive.
Besides the actual driver, there's usually another guy up front, who's mainly there to keep a physical eye on the locos in his power train. And a guy doing the same job at the back of the consist. So basically one guy is driving a 30,000 tonne train, the rest is 'robot'. And has been for a while.
Not unexpected, with modern datacomms, that they'd want to remove the guys from the train and operate it as a semi-autonomous 'drone train' from a comfy computer room somewhere - for half the money, or less.
I'd like to share a revelation that I've had during my time here. It came to me when I tried to classify your species and I realized that you're not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment but you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You're a plague and we are the cure.
— Agent Smith, a character in the film The Matrix
Also Ted K, a convict, in prison.
I have travelled many times on trains. Had delays, no food, and slowdowns. However, the surgeons that have saved the lives of those I love cannot be compared. Transportation, efficiently run, is a public good. But, at the end of the day. a good surgeon is beyond price. It is an INDIVIDUAL good.
While this may sound like alot, 40% goes to tax, 10% into retirement pay.
The company also pays for dorm style housing and has great quality catered means while on shift for sometimes many weeks.
After each several day shift you get flown to Perth. The Pilbara has no housing that you can afford on this salary. Most mining employees rent rooms for the offshift in Perth. Many also fly to live in luxury villas in Bali between work shifts. This is considerably cheaper than Perth.
A week of tinting car windows in the Pilbara nets about $10,000. Gas is over $8/gal and resources are everywhere if you can afford to mine them profitably.
Perth is a mining city, mining services company owners are the local millionaires.
Retail here pays $30/hr and $60/hr on Sundays.
Bearing in mind aeroplanes can fly, and even land themselves at the suitably quipped airport. I'm sure automation of trains is a piece of cake. I won't go into 9/11 and spy drones.
Yeah nothing to run into except kangaroos! I hate how the roos fly under the trucks and out the back tword your car, It's that second kangaroos that gets you killed.
Do people realise that the Ambulances here are "Airplanes" and you can die if you miss the gas station and take a wrong turn down an endless dirt road.
There goes my idea of using the vehicle in front as a "roo catcher". I may have to start holding slightly further back.
Australia has a very tight labor market, and mining related work is usually in remote areas where you tend live in a camp with little entertainment etc.
If the corporations who are paying these salaries are still making good money, then the system is working and labor and capital are divinding the profits equitably.
The question shouldnt be why are the Australian train drivers paid so much, it should be 'given the extreme costs of healthcare in the US, why arent their sugeons getting paid a heck of a lot more'.
The reasons are many, but mostly it is related to monopolisitc control over capital - small business always tightens the labor market and pushes up salaries. Where you have minimum wage laws, complex tax laws, and interfering regulation then small business struggles and the big corporations dominate, the labor market goes loose and salaries drop.
Also for comparison, here is an excerpt from an article regarding salaries in Australia; ".. to make surgery Australia's highest-paid occupation. The average taxable income for surgeons was $350,383, up a handy $17,589 on the previous year."
Read more: http://www.theage.com.au/national/surgeons-make-the-cut-as-our-highestpaid-20130503-2iyma.html
+ 1 billion
Oh yeah, I nearly forgot:
$240 000 ==>>
http://calculators.ato.gov.au/scripts/asp/simpletaxcalc/InputDetails.asp
$81500 tax (+ Medicare levy if you don't have private health insurance)
-> $158 500 after tax.
Now let's go shopping for a nice little house in Karratha.
http://www.domain.com.au/Search/buy/State/WA/Area/North/Suburb/Karratha?...
http://www.homesales.com.au/buy/property-in-karratha-western-australia/?...
http://reiwa.com.au/real-estate/Karratha/?gclid=CPDxxoXRhLoCFcJopAodvlEACw
http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=wa&u=karratha
Have fun!
Organic Human, (noun) Non genetically modified, non surgically altered, non technologically upgraded homosapien. Made by God.
No warranties expressed or implied (read the New Covenant fine print).
Here is a futurist who welcomes his "new computer overlords." David Brin. http://www.youtube.com/watch?v=mIWAla_1PoA Then their is always Ray Kurzweil. http://singularity.com/aboutray.html Part of what makes humans great is our weakness and our suffering. Without something driving us to explore our inner depths and find that strength, alot of people won't bother.
If such a situation occurred in the US (which it isn't happening), the company would just bribe some politician and some regulators, fire the workers after they forced the workers to train H1B visa workers to do the job. Happens all the time in the US
It's hard to compare the salaries of locomotive engineers and surgeons, especially when you consider US income.
In the "eastern" EU, surgeons don't take home even HALF of what a US nurse practitioner does, despite equal, if not often better education and practice qualifications. Then again, the US isn't exactly on top of value of care per dollar, either.
But professionals here now go to the US with plans of returning, as they know the "gravy train" presently operating in the US is soon to jump the tracks.
As a former licensed elevator operator in the US, I try to see where I could fit into this mining industry...
Robo-loco-motives: easy to hack and sure as hell won't protect your haul from marauders.
What is all the fuss about? Surely getting a robot to do this stuff, instead of a human, is a GOOD thing.