As the saying goes, “a penny saved is a penny earned.” However, a new saying might be in order: “a penny made is 2.4 pennies spent”-this is because it currently costs 2.4 cents to make a penny. Because of this cost and the view that the penny is not very useful, there is some push to be rid of the coin. Canada recently did so, showing that the move is possible.
Of course, the cost of the penny might be a reasonable expense for the taxpayer to pay if the penny were useful or at least desired. The Americans for Common Cents (which is, shockingly enough, run by the chief lobbyist for the zinc industry) recently issued a press release that was run by some media folks as an actual report. This “report” claimed that most Americans are still in favor of the penny. However, the survey data for this claim seems to be rather out of date and the source seems to be somewhat biased. This does not show that the claim is in error. However, these two facts do lower the credibility of the claim in terms of its showing what people currently believe about the penny.
Whether people favor keeping the penny or not is an empirical matter, easily resolved by an appropriate survey that presents the question in a neutral manner. After all, it is easy enough to “game” a survey by slanting or loading questions and various other techniques. For example, if I ask “do you favor keeping the penny despite the fact that each penny costs 2.4 cents to make and some people regard it as useless?” I will get rather different results than if I asked “do you favor keeping the penny when getting rid of it could mean that business would round up their prices, thus costing you more money?”
Since I do not have the resources to conduct a representative random survey of at least 1,500 people, I cannot solve this matter myself. I am, however, inclined to think that many people would be willing to do without the penny because of 1) its cost and 2) the fact that it seems ever less useful with each year.
Naturally, the penny is beloved by the folks who sell the metals needed to make it (such as the folks in the zinc industry), those folks who own the machines that count up coins and, of course, their well paid lobbyists who see to it that congress keeps the penny going.
Of course, the preservation of the penny is not without some support. First, there is the matter of tradition. The penny has been around a long time and perhaps the nostalgia value is worth the cost of keeping pennies as currency, despite the cost and reduced usefulness.
Second, there is the not unreasonable concern that prices will need to be changed to account for the demise of pennies. No longer would we see, for example, $9.99, but instead $10-at least in the context of physical money. I suspect that online retailers would still work in cents, since they do not actually deal with physical pennies. So, for example, Apple and Amazon will still have 99 cent items. As might be imagined, merchants in the physical world will almost certainly round up rather than down, which means that people would be paying marginally more to avoid the need for pennies. This does raise the empirical question of whether the increase in prices for the average American would or would not exceed the savings in government spending (and, of course, the financial impact on the industries with a vested interest in the penny). I would assume that even if the penny ceased to be, the money “saved” on this would be rapidly squandered on something else, perhaps on a Vegas conference.
In my own case, I would be fine with seeing pennies go away-provided that the savings where not squandered. For example, if that money were used to support significant programs in education or research into treating some diseases, then that would be fine with me. But, since I suspect that congress would just waste the “savings”, I am also fine with keeping pennies-while they are waste, perhaps they are less of a waste than what the “savings”would be wasted on.