2020 Dec. Goat Daily Rant 04

Penny for your thoughts? A penny saved is a penny earned. Penny-ante. In for a penny, in for a pound.

What’s a penny worth? Almost nothing. Less than nothing, as it turns out. In the amount of time it takes you to pick up a dropped penny, the worker making the median wage in this country (the United States of America) has earned more than its value. Doing so also leaves you vulnerable to a variety of injuries that could cost thousands in health care costs (shut your traps, Canucks, or I’ll start making moose jokes). All that said, most people won’t stoop to pick one up anyway. Most of our transactions nowadays are electronic. Physical currency transactions become annoying when you have to deal with the chaff (I call them my “holiday pounds”), and we generally only use higher-value coins, as for vending machine purchases, or bills, as I do for my haircuts.

Scrap (or melt) value of a copper (actually 95% copper, 5% zinc) cent (1982 vintage or earlier) is around two cents. Scrap value of the copper-cladded zinc (97.5%/2.5% copper) is almost 1 cent. In fact, it costs about 1.99 cents in 2019 to make a penny (the cost has varied as high as 2.41 cents). It costs more to make a thing than its face value. Overall, the Mint lost about $72.6 Million in 2019 making pennies (production cost minus face value). You can’t legally melt down pennies, however, because it would be lucrative and would reduce available coinage, so the U.S. Mint had to clamp down on that. Americans waste an average of 2.4 hours a year handling or waiting for pennies. That’s 787 million hours collectively, or 89 thousand man-years. At the average wage, that’s over $19 billion wasting our time with something that wouldn’t truly be missed.

We have eliminated coinage in the U.S. before. The half-cent was discontinued in 1857 because it was worth so little that it was impractical to produce and distribute. With inflation, its 1857 value today would be 14 cents.

So why do they stick around? Inertia. Nostalgia. We have always had them, so we should always have them. 51% of Americans surveyed in 2014 opposed ditching the penny. But it’s not just that. The Zinc lobby (yes, there is a Zinc lobby) and their organization “Americans for Common Cents” lobbies the U.S. Congress and the U.S. Mint to keep producing this perennial money-loser.

Arguments for keeping the penny:

• It’s a tax on poor people. Argument: yeah, rounding off to the nearest nickel will favor the retailer by half a cent per transaction. One whole entire half a cent. Some municipals will attempt to push their local sales taxes up to the next nickel. Overall, not a lot lost, and retailers can always offer to round down in order to outdo their competition.
• Charities will suffer when people can’t give pennies. Argument: Both Australia and Canada discontinued their respective minimum currency in recent years, and there has been zero impact on charitable giving.
• I won’t be able to offer a penny when I say “A penny for your thoughts?” Argument: Yes, some people really have this concern. I have heard this phrase, and maybe been physically offered a penny once. For ten bucks, you can get enough pennies to do this once a day for the next 2.7 years. For a hundred bucks, 27 years. Just a penny a day, really.
• They honor Abraham Lincoln. Argument: with a negative-value coin? He’s got the $5 bill already, one of the most numerous paper currencies.
• The American people like them. Argument: yeah, we also like deep-fried butter sticks and bacon-wrapped bacon and those things are going to kill us.

If you like pennies so much, buy up a couple of buckets of them from your local bank (assuming there is a physical location, considering everything is done electronically now).

Next up: The nickel.
Yeah, it costs just over 7.6 cents to make one.