|Best Use For Pennies Is A Bathroom Floor?|
"It was just one of those no-brainer slam dunks. It's a place where we can save money," said legislator Pat Martin, who has long campaigned for the penny to be abolished. In the middle of 2014 the Toronto Sun reported that since circulation of the penny was discontinued on Feb. 4, 2013, more than four billion of the copper coins had been recovered, equivalent to a face value of approximately $40 million. The Royal Canadian Mint at the time estimated that approximately 6 billion pennies were in circulation when production of the coin ceased in 2012. I suspect the number has dropped substantially since then and its use has become non-existent. Once the distribution of the coin ceased vendors were no longer expected to return pennies as change for cash purchases and were encouraged to round purchases to the nearest five cents.
|The Penny No Longer Makes Sense|
Coins are designed by the government to be a simple and efficient medium for the exchange of goods and services. For many years there have been discussions about discontinuing the penny which has become obsolete because of its minuscule purchasing value. The penny is a perfect example of our government's inefficiency and waste, and the cost is a burden carried by business. If an employee is paid $12.00 an hour they receive twenty cents per minute. Business simply cannot afford to pay an employee to handle and count pennies, the cost of the labor exceeds their value. According to the “citizens to retire the penny” it cost the Country one hundred million dollars a year to produce the penny, and more then $15 billion dollars annually is wasted just in handling it.
The debate against continuing the penny is overwhelming, anyone still supporting it most likely has not given the subject much thought or is simply resistant to change, “the penny doesn't make sense" From an environmental standpoint the penny is also a disaster when you consider all the energy used to make, transport, and distribute this useless coin. Currently, it costs the U.S. Mint 1.66 cents to make each one-cent coins, meaning that taxpayers are losing 0.66 of a cent for each one of the 9.1 billion pennies the Mint produces each year. That is a loss of $60,181,440 to produce pennies in 2016. The U.S. Mint makes an average of 21 million pennies per day which adds up to around nine billion pennies annually. If we just get rid of the penny, the U.S. Mint would cut its work in half. This figure does not include the time, fuel, expense, and hassle of carting all of those pennies around to the banks, merchants, etc.
If we stop making pennies we would also save all this cost associated with it. Remember the penny coin, has almost no purchasing power today and the cost of making the pennies is higher than face value. The melt value of pennies ranges from more than two cents for the pre-1982 copper pennies, to nearly a full cent for the zinc pennies. Logically, sooner or later the penny is destined to the dustbin of history. Ditching the penny would cost literally nothing and with a flourish of the executive pen create huge annual savings for business but such a move remains fiercely opposed by metal alloy industries and Coinstar, which makes millions each year by helping people get rid of their unwanted change.
According to the folks at RetireThePenny.org, the average American wastes 2.4 hours a year handling pennies or waiting for people who handle them. This statistic is the result of compiling several penny-handling related events. These events include the ubiquitous 30 second period we sometimes spend waiting for someone who has to dig through their pockets or purse to find that last cent so they can pay for something with exact change. They probably do this, so they don't get stuck with any more pennies. Still, we should not expect the government to take action anytime soon in our country so focused on pandering to those who fear change. It seems we may need some kind of push to bring about the penny’s final demise, because if we wait for those in charge of such things to do the logical thing we may be waiting until the end of time. Small things matter, if our politicians can’t get this right how can they ever deal with the more important issues facing our nation?
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Well doing your research on Canada and their discounting of the penny did you come across the fact that the Royal Canadian Mint now makes almost as many nickels as they did pennies? And if the same thing where to happen in the US that would twice as bad, since a nickle costs 6.6 cents to produce?
Please do some more research on the matter since the cost to the US Mint would actually go up with the ending of the penny.
Thanks for the comment but I respectfully disagree with your argument. When I spend forty cents and pay with a dollar my change would most likely come back as a dime and a quarter. I see the impact on the nickel as not being a big issue. An increased use of the nickel does not justify keeping the penny, however, without the penny they could eventually make the nickel smaller and less expensive to produce.ReplyDelete
I really enjoyed this article, Bruce.ReplyDelete
I am certain that the U.S. penny is on its death bed, but that the politicians will not kill it because that would be an indicator of the monetary decline of the U.S. dollar.
I explored this idea more thoroughly in my own article about the death of the penny:
You have a great blog. Keep up the good work.