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Time to Retire the Penny
By John W. Kennedy | April 17, 2008
In the 18th century Benjamin Franklin quipped, “A penny saved is a penny earned.” In the 21st century, a penny won’t earn you much. In fact, the one-cent piece is really only a nuisance, and an expensive one at that.
A couple of years ago, the penny began to cost more than its worth. Now, rising metal prices mean it actually costs the U.S. Mint almost 1.7 cents to make a penny (made of 97.5 percent zinc and 2.5 percent copper). In these days of rising prices and escalating deficits, does it make sense to keep it around?
What exactly can a penny buy these days? You can’t even put one in a gum-ball machine or parking meter anymore. Many of the pennies manufactured each year wind up sitting in jars on shelves, at the bottom of purses, in car ashtrays and anywhere else people forget about them. Consumers don’t want to be bothered with something that has so little value.
I suggest we eliminate the 7 billion pennies minted annually and merely round off to the nearest nickel the cost of an item. That’s what New Zealand had just done when I visited in 1989 and shopkeepers seemed to be handling the transition splendidly. Think how much time could be saved shopping if clerks didn’t have to count out pennies to customers.
Jeff Gore, head of a group called Citizens for Retiring the Penny claims using pennies costs the nation $10 billion annually and that the average person wastes an entire day a year dealing with pennies.
Nevertheless, public sentiment is against eliminating the penny. A HarrisInteractive poll released Monday showed that only one in four Americans are in favor of abolition of the one-cent piece (although 34 percent of men favor it—probably because they have to carry coins in their pockets instead of purses—only 14 percent of women like the idea.)
I’m not too hopeful that the idea will gain traction. Previous attempts in Congress to eliminate the penny have been failures. When it comes to cents, lawmakers don’t have much common sense.
Topics: currency |