The Kirkwood Call

Making no cents

Carter Philipp, opinions writer

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Nothing in this world is a terrible as the penny. It seriously makes no sense. Imagine the longest Schnucks line that you can, with you at the back. The person’s total at the front of that line is $10.02, and since they are such a good citizen, they try to pay with exact change. Except they do not have the exact change. They do not have the two pennies. They only have a 10 dollar bill. What follows next is the single most awkward staring contest where the cashier eventually gives in and exempts the person from the two cents. Even the cashier knows that a penny is not worth the trouble.

The story of the penny begins at the same time as our first U.S. mint: 1792. This mint produced the quarter, dime, half dime (or nickel) and the penny. These pennies, born of a newer, richer nation, were made of 100 percent copper. But, that didn’t last long. The price of copper gradually went up, and due to inflation, the value of the penny went down. This caused the mint to change the penny to 5 percent zinc and 95 percent copper, then eventually to 95 percent zinc and 5 percent copper. According to the New York Times, the value of the penny reached its tipping point in 2006, when a penny was worth 1.73 cents due to the copper to zinc ratio. This prompted people to start melting these supposedly 1 cent coins to sell the copper for profit.

In a logical world, the government would have realized the penny was costing more to mint than it was worth and would have been happy its citizens were removing it from circulation. But instead they made it illegal to melt U.S. currency, and to this day, U.S. mints still produce around four million pennies each year. According to the Wall Street Journal, it costs roughly 1.5 pennies to create one penny in 2017. It obviously was not the best way to deal with the situation.

Even if pennies were minted of something closer to their true value like plastic, or even paper, it wouldn’t fix the problem that pennies are terrible for people as well as the economy. The purpose of cash is to buy things. Someone has something you want, so you give them your cash as a means of exchange so you can have that thing. In the old days, pennies could actually buy things on their own, like candy, but not anymore. Good luck buying a $60 toaster with a whopping 41 pounds of pennies. People use pennies as exact change, but the problem with exact change is that the product you pick up off the shelf isn’t listed with tax, so unless you can multiply by 8.875 percent in your head, you won’t know your true total until you are at the front of the line. Just like our example, our lightning fast world will not allow one person to fumble for exact change at the front of the longest Schnucks line you have ever seen; you could cause someone to miss a meeting, be late to a birthday, or be late to a meeting for a birthday. At some point it’s simply not worth our time to divide up transactions.

Some people suspect prices will rise and charities will lose money if we abandon the penny. But many countries have dropped their own one cent coin, namely Australia, New Zealand, Finland, the Netherlands and, most recently, Canada. According to the Canadian Broadcasting Corporation, Canada simply stopped minting their penny; however, they continue to accept it as legal currency. As far as transactions go, if you pay with credit or debit, you will still be charged as if pennies exist (ie: $7.46), but if you pay with physical money, you can either pay with some of the dead, inefficient currency, or if you have none, the store will automatically round to the nearest five cents (ie: $7.45).

Possibly the only thing the penny has going for it is Abraham Lincoln. But for all of the Abe enthusiasts, have no fear, because do not forget Lincoln will always be on the $5 bill. A piece of currency that is not going anywhere, since it actually proclaims its true value.

And one final thing, before the first U.S. mint was shut down, it produced another coin. That was the half penny. According to the Royal Mint Museum, the half penny stopped being minted in 1956, because it was worth too little. The interesting part is that, according to the New York Times, when the half cent met its fate, it had more buying power than today’s dime. So instead of simply copying our sister to the north when it comes to abolishing the penny, the United States could revolutionize the overall efficiency of the world’s economy by maybe even cutting the nickel or dime. This action would hopefully have cents making a lot more sense.

 

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Making no cents