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Western Australia feels a bit like the Alaskan gold rush, the Texas oil boom and Michigan's iron age rolled into one and set in a Mad Max movie, only the motorcycle-riding gangs are motorcycle-riding millionaires. Taken as its own country, Western Australia's gross state product of more than $88,000 would place it at the top of GDP-per-capita rankings, behind the likes of Luxembourg and Qatar. Despite an influx of more than 600,000 people over the past 10 years, Western Australia enjoys just 5.1% unemployment. Colossal wages have led to the formation of Australia's own class of Beverly Hillbillies, or "cashed-up bogans," as they're called in Perth, the only city in Western Australia. In the past decade, Perth has been transformed into a playground of the very wealthy. "This is a bit like the Wild West," says Perth Lord Mayor Lisa Scaffidi.
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How long can the run last? As every miner knows, natural resources are a finite commodity, and Western Australia has a long history of boom-and-bust. Gold was first found here in 1848. In the 1960s, oil and gas off the coast and massive iron veins were discovered. The state also boasts some of the world's largest deposits of silver, nickel, uranium, rare-earth minerals, marble and granite. But, by the time the demand for gold and nickel plateaued in the 1990s, Perth was dismissed as the "most isolated capital city in the world," Scaffidi says. "We felt like a satellite bureau to the East Coast." Then China surged. Perth is within a two-hour time zone of 60% of the world's population, a population seeking entrance to the middle class. Western Australia was perfectly positioned to help realize that dream, but first it had to find the workforce to build the massive infrastructure required to extract and export the resources.
To do so, Western Australia pulled blue collar workers from all over Australia and New Zealand, driving up wages as well as further bolstering the commodities sector and the Australian dollar by extension. Why be a cab driver in Sydney making $40,000 a year, when you can drive trucks to the mines for an annual $200,000? Why be a plumber in Melbourne unstopping people's toilets for $45,000 a year when you can earn three times that fixing hydraulic joints — essentially giant elbow pipes? And construction is construction, whether building a hotel or pouring concrete cylinders. The territory's population has increased in the past decade by nearly 30% to 2.5 million people. Some, like Wallace, drive in and out, but the majority live in Perth, making them the largest flying mining workforce on the planet.
In Osborne Park, a suburb north of Perth, there exists a road that can only be described as a giant shopping mall for the superrich. The Ferrari and Maserati dealer is just down the street from the cigarette-speedboat store. Want a new pool? A spa? A Rolls-Royce? All these, jet skis, ATVs and custom home theaters are for the offering. Downtown, Chanel, Tiffany's and Louis Vuitton have set up shop. Perth boasts a world-class casino and legal brothels. The housing market is tight: little stock and incredibly pricey. Australia's most expensive home is in Perth's suburbs, a $53.5 million spread owned by mining magnate Chris Ellison. The boom has also helped drive up real estate prices in the few tiny mining towns that resist the desert. Homes go for $1 million in Kalgoorlie.
In the Exchange's pub, "Big Bad" John McKay, 62, props a dusty boot on the dusty metal trough that runs at the bottom of the bar, a remnant from the days when miners used to urinate at their stools, saving them a trip away from their beer. "The old way of mining, of taking pride in your work, is dying," he grumbles. "The streets are paved with gold until they aren't." Most analysts agree this cycle of expansion is now over, with many companies choosing to pay dividends in the past six months rather than invest in new projects. But with ever voracious Asia nearby, the pause isn't expected to last more than a few years. There's still $240 billion in committed projects in the pipeline and another $316 billion worth being considered, says Steve Knott, CEO of the Australian Mines and Metals Association. For now, Western Australia's yellow brick road stretches far into the shimmering desert.