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…
[tags]money, penny, US Mint[/tags]
3 comments
That’s what happened to our penny. The British pre-decimal penny was so big that it cost more than 1d to make (and had more than 1d of scrap metal in it) by the mid-60s, so the government started us on a five-year move towards decimalisation.
(And, apparently, some people only discovered we were going decimal the day that decimal coins took over, having managed to completely ignore the adverts, posters, and having two prices printed on everything before the changeover!)
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.
I think the law currently under consideration says to round down if the price ends in 1, 2, 6, or 7, and round up on 3, 4, 8, or 9. A study seems to indicate that this balances out quite well. (At least at gas stations, anyway.) And, of course, credit transactions wouldn’t be affected.
Speaking as a former resident of England, I’m all for this. I’d love to see less pennies and dollar coins instead of dollar bills.
Oh, and supposedly things are priced at $9.99 so that you’ll wait for your change, and the assistant has to put the $10 bill in the cash register. A price of $10 is useless for stopping feared thefts by staff, so they’ll have to go to $9.95 until the nickel is wiped out too.
The other thing the Mint here did was halve the size of first the 5p coin and then the 10p coin. A while later, it shrank the 50p, too.
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