I think it is. And I'll tell you why! This question has been debated for years. Rep. Jim Kolbe, R-Ariz., has introduced bills in Congress twice, once in 2002 and again in 2006, to eliminate production of the penny. Both bills died.
Based on recent metal prices the cost of minting coins has skyrocketed in the last three years. In the last year alone the cost of minting a penny has risen from 1.23 cents per penny to 1.7 That's right! It cost more to mint a penny than its face value. It's getting to the point that the time may have come to phase out this obsolete coin.
The U.S. Mint produces about 17 billion coins annually. Over half of the coins minted are pennies. Yet, in spite of the fact that minting pennies is a losing situation, the mint showed a profit from the minting of all coins collectively. If the penny were dropped from production it would add another $151 million to that profit. We could apply that to our national debt. Don't you think?
So, you ask, what would happen to our monetary system if we eliminated the penny? As suggested in previous proposals, the penny would only be eliminated from cash transactions. We are moving away from a cash society with more transactions being conducted using debit or credit cards. Credit card, debit card and check payments would still be paid to the penny.
Groups such as Americans for Common Cents, which is a pro-penny lobby funded by the zinc industry, contends that eliminating the penny would lead to higher prices, hurt charitable causes and affect the poor the most. When you consider that a penny is 97.5 percent zinc I can see why they would say that, but all three statements are untrue. And, as my Dad used to say, "Common sense is not all that common."
Research by economics professor Robert Whaples at Wake Forest University, using data from 200,000 transactions by a multi-state convenience store chain, show that rounding would have virtually no impact. In fact the consumer has the edge to the tune of about 1/40 of a cent. How it works is, cash transactions ending in one, two, six or seven would be rounded down saving the consumer one or two cents. Totals ending in three, four, eight or nine would be rounded up costing one or two cents more. When you consider that most people do not purchase one item and with sales tax added in most states these totals are completely random. The bottom line is that at the end of a year the cash difference between rounding and using the penny would be minute. Today's electronic cash registers can be programmed to automatically round the total sale when the cash key is hit. So we wouldn't waste time with clerk or customer trying to do the math. So why would a merchant raise prices when it is a coin flip (oops!) rounding up or down?
How eliminating the penny will hurt charities I haven't figured out. Penny drives will have to be called nickel drives and collection boxes for a variety of causes will contain nickels and dimes instead of the pesky penny. I see that as a plus. How the rounding system would hurt the poor is another one that escapes me. I have yet to see any data to back that one up.
With the cost of all goods rising, the value of a penny is almost non-existent. Gasoline is $2.50 a gallon, bread is $3 a loaf, milk is $3 a gallon; the list goes on. Most stores think so little of the penny that they have cups at the register full of pennies for you to use. The time wasted searching through your pockets for that elusive penny is not worth it. Vending machines do not accept it. Parking meters do not accept it. Forty percent of the American public would not stop to pick one up if they saw it on the ground.
Another argument is that elimination of the penny will require more nickels. That statement is just absurd. Do these people just sit around and make this stuff up to see if any of it will fly? There are many ways to make change for the remainder of a dollar. Using the most simplistic formula, of the 99 change combinations, pennies are used 80 times - with a total of 200 pennies for all the combinations. Nickels are used 40 times - with a total of 40 nickels. Dimes are used 60 times - with a total of 80 dimes. Quarters are used 75 times - with a total of 150 quarters.
If the penny were abolished and we rounded all cash transactions to the nearest nickel, these same 99 transactions would use: Nickels - 40 times with a total of 40 nickels; Dimes - 60 times with a total of 80 dimes. Quarters - 77 times with a total of 158 quarters. That is amazing!
So we eliminate 200 pennies; usage of the nickel and the dime is unchanged and the quarter is used in two more transactions using eight more. And those two extra transactions are the 98 cent and 99 cent level when you are rounding up, so you are not using the eight quarters after all. Guess what? Unchanged ... Based on that information it appears that we could get along without those pennies filling up our pockets and purses. I mean, you can take my word for it or figure it out yourself. The results are the same. The penny has had its "15 minutes of fame." Now is the time to retire ... with dignity.
Saving pennies is also no longer worth the time. Banks seldom will take pennies in bulk and will not take them at all unless they are rolled. Who has the time to roll pennies? If it takes three to five minutes to roll 50 pennies you are making $6 to $10 dollars an hour and you end up with carpel tunnel in your wrists. Not to mention the drive to the bank and waiting in line, it doesn't seem worthwhile.
The argument that the penny is part of our history is a valid one. So is the Mayflower, but we moved on. So how about this? The Lincoln penny was introduced in 1909, the centennial of Lincoln's birth. How fitting it would be to eliminate it in 2009, the bicentennial of his birth.
That's just what I think.
John Nechvatal is a Chinook Observer reader in Seaview.