Putting Pennies Out to Pasture

Originally posted by Lenny Eskin on The Andera Blog. Follow us on twitter @AnderaInc!

A penny for your thoughts? I should’ve probably offered a quarter instead, since a penny won’t incentivize anyone to share much of anything these days. Honestly, they aren’t even worth the time you’ve wasted thinking about the proposition. So, let me suggest a more valuable proposition: let’s dump the penny.

The penny has long been the ugly step child of our nation’s currency. That’s not even being very nice to ugly step-children because the penny is literally worthless. It’s actually worse than worthless; it costs us 2.4 timesas much to mint a penny as the actual value of the currency. It’s also practically useless. You can’t buy anything for a penny and hardly anyone accepts them!

So, how much actual money does that add up to? It costs $120 million to mint approximately $50 million worth of the money sucking cent according to www.retirethepenny.com. Even conservative estimates put the annual cost to mint at $60 million. That’s $60 million dollars we dump down the drain… each year! That can’t be goodfor our drinking water. So aside from saving $60 million per year and more than half a billion dollars over 10 years, what else is wrong with the penny?

• Pennies are annoying – The time businesses and consumers spend handling, wrapping, and processing pennies is wasteful. Actually, this applies to all coin currency.
• Time is money – Robert Whaples, professor at Wake Forest University, argues that this lost time costs us $730 million a year. Ouch! Makes $60 million seem like pennies.
• Gross, pennies! – These dirty little mongrels carry bacteria, corrode easily, get swallowed by young children and pets alike, and are responsible for typhoid fever. Okay, I made that last part up, but you get the idea.

The only legitimate argument against stopping penny production is that the alternative is rounding to the nearest nickel. This “could” lead to a minimaland temporary bump in inflation. While there is potential for that, it didn’t happen when we eliminated the half-cent in 1857, and that was when the half-cent was worth roughly 5 times as much as a penny is worth today.

The other argument is it will piss off deal savvy marketers that don’t want to round to the nearest dollar to create a good deal. As a marketer, I must ask, why must we pander to these dopes? If they are bummed out that McDonald’s won’t be able to offer a 99 cent cheeseburger anymore, $1 for your own personal heart attack is just as convincing in my opinion. Plus, it encourages truth in advertising, which I am always in favor of.

Okay, so, how do we faze it out? Well, how about organizing a national penny drive and giving that money to charity. Is it that crazy? Time warp: when I was still a wee-little bugger, barely 7 years old, I used to save all my pennies in a little blue jar on my desk. I would run around my house picking up all the coins that had fallen to the floor, in between couch cushions, and that were littered across the teenage wasteland that was my sister’s car floor. That car was practically a roving copper mine (early 80’s). I was a proud, diligent, and effective little saver. The idea was to save up my money so I could donate it anonymously to charity as Tzedakah. For those that aren’t familiar with the term, it roughly translates to charity in Hebrew. All told, after two years of saving my pennies, I gathered $41 dollars and 37 grimy cents worth of pennies. Meanwhile, I used all the “real” coins to buy myself ice cream to feed my cavities. Most importantly, I learned a valuable life lesson to save, give to charity, and I helped some starving children in Africa while doing it. Is there a better lesson to teach our debt-strapped nation?

So, what’s the problem? Who’s holding our nation ransom?

It turns out, *shocked face*, lobbyists are. Not just any lobbyist, the most questionable kind of lobbyist; the zinc lobbyist. Since the penny is 97.5% zinc and 2.5% copper (not including the plating), Jarden Zync, the company that owns an exclusive minting contract on the penny, also funds American for Common Cents. They’ve tried desperately to save the penny, and Jarden Zync is paying over $140,000 a year to retain a legal arm for it’s lobby. What is our country coming to? Well, aside from going broke, Honey Boo-Boo qualifying as a modern day celebrity, and the impending zombie apocalypse, we’re apparently being bullied by the zinc lobby.

My colleague, Mel Friedrichs, believes we should get rid of cash altogether. Which is a great idea, in theory. Can you imagine a cashless future? While, I’m not sure that’s totally feasible due to the cost of inflation, removing the currency itself, destabilization of global markets, the strain on lower and middle income consumers, it’s a noble goal that removing the penny would bring us one step closer to achieving. So, gather your pennies and donate them to a good cause. We’ve been penny-wise and a pound-foolish for too long.