Dollars, Knowledge and Attitude

This page written circa 1 August, 2001.

Another colleague left MWTC last week to join a startup. It seems like this is what you have to do to get well remunerated and technically intrigued these days. Well, perhaps not.

The UK has recently taken Australia's place as the developed country that pays its manufacturing workers the least. In addition, the UK occupies second place in the highest pay stakes, paying its CEOs a median salary only eclipsed by that in the USA. (It is eclipsed by almost a factor of two, though.) Australia, surprisingly, comes in third in that race, ahead of Japan (at 85% of Australia's score), France, Sweden, Germany and so on. That paints a rather awful picture of Australia, right up there in the fat-cat stakes but sunk in the rewarding of the productive worker. CEO pay in the UK had to increase 29% in the last year to achieve that step.
Manufacturing pay, by the way goes like this, in GBP: Japan: 36,779, US: 31,603, Germany: 26,124, France: 24,574, Sweden: 23,034, Australia: 21,010, UK: 20,475.

Australians are well educated, technologically enabled, and yet Australia is economically sinking. I read that James Hardie (a large Australian construction materials firm) announced it would be shifting its domicile to the Netherlands in a bid to lower its tax bill (by an estimated 15--20%). Why is it so? I will give you my opinion.

There is an attitude in the air here in the US. It has been here since before the Declaration of Independence. It has been criticised in many a history book as a "preoccupation with the making of money". It is taken to obsessive extremes by the like of Bill Gates, but it is also acknowledged by self-effacing, altruistic folk heroes such as Linus Torvalds. (Torvalds is reported in a recent biography to justify his move to California by observing that the vastly greater salary differential "works" in getting the best out of people.) This attitude means that the financial news gets equal time with political or social events. It means that many workers follow stock prices, at least of their own company. The power of the dollar is understood in the USA, but not so in Australia. The average Aussie does not have his fortunes linked closely enough to national fortunes, does not have his conciousness raised to business matters as a matter of course, so he does not pay close enough attention. Australians are in danger of coming to believe, as a country, that the world owes them a living, while having wages less and less representative of that. They are asleep to the ways of the dollar.

For a country whose citizens are renowned for being "straight up", "hard core", direct and down to earth in their speech, and generally calling a spade a spade, Australians are not particularly assertive. Americans are, and it makes good financial sense. Example: In Agilent's current pay reductions, "non-exempt" workers (people who theoretically clock on and off, working fixed hours) are given time off in lieu of pay. "Exempt" workers on the other hand (who are paid to do a job, not put in certain time) do not have rostered days off. A FAQ is simply: "It looks as if exempt workers are being asked to work the same for less dollars... is this true?" The original reply to this was such magnificant management waffle that it was, after three sentences or so, quite meaningless. Complaints were voiced about the answer, the CEO was quizzed at question time after speeches, and a lot of fuss was made. A subsequent response admitted the truth of the matter, citing the latest labour laws that prevent the company doing anything else, and almost apologising. No more fuss.

A consequence of these missing attitudes is that Australia and Australian business are increasingly directed by people selected for their assertiveness and their image rather than their ability. Business should not be like politics, where selection is based on your ability to get selected not your ability to perform. It seems from UK news sources that this complaint is frequently voiced there, as well it might, since the UK is worse-afflicted than even Australia.

The question we are most often asked is "[when] will you ever return to Australia?". It is not clear that we ever will. We will have two college-age children when we want to retire. Sydney is probably more fun than Santa Rosa if you are retired, it is certainly cheaper than San Francisco if you are not buying BMWs or electronic toys, and education may still be better value, so there is some appeal there. It can be said that it is unlikely I will find an exciting startup company in Sydney offering an attractive package and interesting work... in fact it looks as if I would be better off in Scandinavia on that score.

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