Is the (US) penny doomed?

[dianeduane]

The question comes up once again, as the one-cent piece now costs more to produce than it's worth.

...The U.S. Mint could lose a mint, or $43.5 million, producing the coin this year, according to at least one expert.

...The Mint is also losing a pretty penny on the nickel. The agency, which plans to produce 1.7 billion of them this year, shells out 6.4 cents for each five-cent piece. Yet, there has been far less hoo-ha over the nickel.

"There is more sentimentality associated with the penny," said Anthony Zito, 53, former president of the Massapequa Coin Club and avid penny collector. "It has a beloved president on it and has inspired a host of sayings, such as 'penny-wise and pound-foolish,' 'a penny saved is a penny earned' and 'a penny for your thoughts.' It is more ingrained in our culture than any other currency."

Well, the "pound-foolish" saying would have come from the British side of things, or at least the pre-dollar side. 

Another take on the situation from further on in the article:

Another penny advocate, Mark Weller, executive director of Americans for Common Cents, an advocacy group, argues that the elimination of the penny would hurt consumers and many charities, which rely on penny drives as part of their donation collections.

Most convenience stores would round up instead of round down, costing consumers $600 million, said Weller, citing a study by Raymond Lombra, a Penn State University economist.

Weller added that Kolbe is pushing the legislation because Arizona is a copper-producing state. The elimination of the penny would force the Mint to make more nickels, which are mostly composed of copper, he said.

"This is special interest legislation at it worst," Weller said.

...There was a lot of noise, I seem to remember, when the euro was first being structured, as to whether or not there should be a one-cent coin. I can't now recall all the justifications for the "yea" or "nay" positions. Whatever: we've got it now.

Meanwhile, it'll be interesting to see if our cent outlasts the US one...

 

 

Comments

[captainlucy.livejournal.com]

OK, the 1c coin may be small, but is it as small as (for example) the British 5 pence coin?

A couple of radical ideas. If the materials cost more than the actual coin is worth, try making the coin smaller. Reducing the radius of the coin by 10% and thickness by 20 will save over 35% in the amount of material required to make each coin. (of course, this saving is then slightly off-set by the large number of new coin dies that will be needed).

Alternatively (or indeed additionally) try making the coin out of a cheaper alloy. I would imagine the market prices of tin and aluminium are a good bit less than those for zinc and copper, so increasing the proportions of these metals in the coin would almost certainly save money. Plus, if the coin was made predominantly out of aluminium it would be noticeably lighter, thus giving a small saving transportation costs as well.

[kengr]

Can't change the size. that'd break every coin sorter, and automated cash register out there.

Can't change the weight either for related reasons.

[xipuloxx.livejournal.com]

I don't think that's such a big problem. Some years ago, the UK changed the size (and possibly the composition) of the 5p, 10p and 50p coins. I presume the government had to pay for all vending machines to be changed over, but since they were saving so much money by minting smaller coins, they could afford a one-off expense like that.

If the US were to do the same, they'd probably have to change more than one coin to make it worthwhile, though.

[kengr]

As far as I know, when the introduced the Susan B Anthony dollar (there was another *huge* dollar coin before then), to the best of my knowledge, the government did *not* pay for the changes.

It was tolerated only because it made it possible to handle dollar coins in change mechanisms and the like which let some machines avoid bill handling mechanisms for giving change. (they still needed bill mechanisms for accepting payment).

But changing the penny doesn't do anything useful for anybody *but* the government.

So a lot more folks would fit a penny that required all that re-tooling than would fight just dropping it.

[xipuloxx.livejournal.com]

But changing the penny doesn't do anything useful for anybody *but* the government

Well, a smaller penny would be lighter. I'm certainly glad our coins are smaller than they used to be; it means less wear and tear on my pockets!