Big Pay Cuts For Mining Workers Are Another Sign The Resources Sector Is Crunching

Photo: Getty/Paul Kane

Skilled geologists who have ridden the crest of Australia’s resources boom are now working for three quarters of last year’s pay as spending in the sector dries up.

Workers were paid a premium for working long hours in remote mining towns throughout the boom. According to 2012 ABS data, the average non-managerial miner earned $52.30 an hour – more than 1.5 times the national average of $32.70.

But online jobs site FIFObids reports this month that demand for fly-in-fly-out workers has fallen significantly throughout the year, with geologists working for an average of $52 an hour now, compared to $71 an hour last June.

Across the board, FIFO workers have cut their wage expectations to an average of $51.60, down 13.7% from $59.80 last year.

FIFObids hosts the CVs of about 55,000 mining workers and allows companies to bid for their services. Director Mike Haywood said the site facilitated 400-500 job placements in December but only 200-300 in the past month.

There are now 11,159 workers actively looking for work on the site, including 578 engineers, 183 geologists, 727 managers, 529 administration staff, 649 electrical tradespeople and 403 mechanical tradespeople.

Haywood said demand for mining workers typically came in cycles, beginning with engineers and geologists to assess new projects, administration and management for project execution, and finally mechanical and electrical trades.

A fall in the demand for geologists reflects less exploration work, which could lead to fewer jobs further down the pipeline in time.

Haywood suggested that falling labour costs could make projects more viable, although he said the sector would only recover if commodity prices came back up, if government policies changed, or if shale mining took off.

And while headlines indicate hiring activity from major players like BHP and Rio Tinto have slowed, Haywood said FIFObids had facilitated more SME hires as labour costs fell.

“Big miners were pricing people out of the market. A lot more SMEs are now picking [workers] up at lower rates,” he said.

“If the price of labour comes down, that makes a lot of projects more viable, then [the market] starts to turn around again. The market is going to balance itself out.”

The Bureau of Resources and Energy Economics expects mining investment to fall from a peak of $268 billion in 2012 to $25 billion in 2018.

Now read: Australia’s Mining Boom State Has Slipped Into Recession – And Analysts Are Sounding Really Worried

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