Recently, my work place has been trying to save every pence because they've gone way over budget for this year, and it's not even half way through the fiscal year.
My supervisor couldn't even order some name tags for a conference because of the budget cuts. So I've had to come up with innovative ways to make materials we need for our displays etc. The most recent project was to make brochure holders out of cardboard and other "waste" material.
Common sense would dictate that it's absolutely insane that I would be paid so much to make brochure stands! It's probably only $5 to buy them...but they have to pay me way more in wages to make them.
But I realised today why it is actually rational (or at least reasonable) that I should make the stands.
I'm the sunk cost in this equation! My wages are already set aside because they have to employ me until my term ends. That means my wages cannot be reclaimed no matter what they do..it's not like they can buy the brochure stands and tell me to stop working for 2 hours, i.e. my wages are 'sunk' in economic terms.
Maybe wages shouldn't be sunk at all. I think it happens in both pay by the hour and pay by the month systems....I wonder if this kind of absurdity happens in successful businesses like microsoft?
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