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The Daily Wildcat

The Daily Wildcat

 

    No cents in keeping pennies

    Ryan+Johnson
    Ryan Johnson

    Join me on my crusade. Every time I get a penny or three at a drive-through window or Starbucks, I do anything but keep them.

    If there’s a donation box, like at Circle K, the pennies go there. If there’s a give-a-penny-take-a-penny cup, they go there. A tip jar, there. But otherwise, I create my own place. A windowsill or a countertop, or even the ground.

    Think that’s littering? That’s just the point. When something that is supposed to serve as a holder of value is so worthless that you are scorned for leaving it lying around, should the U.S. government really be producing 10 billion of it every year?

    Absolutely not. And retailers should cooperate by using the cash register slot pennies currently occupy for dollar coins.

    The penny has become a joke. A single one buys nothing, but anyone who whips out a bunch draws the ire of the cashier and everyone else in line. Vending machines won’t even be bothered by them. What does it say about pennies that the only thing they can be used for is to avoid getting more pennies?

    Stories about octogenarians cashing in millions of pennies are endearing, but the reality is that fully two-thirds of them fall right out of circulation – think sock drawers, couch crevasses and rain gutters. Every other country in the G-8 has eliminated its smallest unit of currency, and we should too – for our sanity and for our economy.

    The U.S. mint says that it costs .81 cents to produce a penny, but many argue that the true cost is actually more than a penny. Add to that effects such as wrapping costs and pennies quickly look like a waste. Did you know that stores pay 60 cents for rolls of 50 pennies?

    Then employees spend time unwrapping them and counting them to hand out. Walgreens estimates that a typical drugstore would save $2,000 per year just from these effects were the penny to be eliminated, and that transactions would happen 2.5 seconds faster.

    A congressperson first proposed eliminating the penny in 1989, and Jim Kolbe has discussed it further during this decade. But alas, it still doesn’t look like it is going to happen.

    Unbelievably, 65 percent of Americans favor the continued existence of the penny, and Canadian, Alaskan and Tennessean zinc lobbies (pennies are 97.5 percent zinc, and only coated with copper), not to mention Illinois (home of Lincoln), oppose its removal.

    By comparison, dollar coins fare poorly. The Susan B. Anthony coin’s production plummeted after its first year. And even though the Sacagawea dollar coin was supposed to perform better because it doesn’t look like a quarter, as the Anthony coin did, it suffered the same fate.

    But there is hope: While pennies fall out of circulation because people don’t care enough to keep track of them, dollar coins fall out of circulation because people collect them.

    My favorite cashier at No Anchovies told me that one of the managers takes all the dollar coins out of the register for his collection. That amounts to a huge profit for the U.S. Mint, as collectors are essentially paying for coins they will never use. The first half of the state quarters program brought in an estimated $4 billion from such collecting.

    And dollar coins are due for a new boost. Starting in 2007, dollar coins will feature the portraits of U.S. presidents, which will surely increase their use.

    One measure would help the dollar coin more than any other – elimination of the dollar bill. Because coins last longer than paper currency, that would save the U.S. $500 million per year. Ecuador, which uses U.S. coins and bills, has already achieved widespread usage of the dollar coin for that reason.

    Arizona in particular should want the dollar coin to be more widespread. As the state that produces the most copper, Arizona would see an economic boost from its use – the dollar coin is 88 percent copper.

    In fact, all coins except the penny have lots of copper, including the nickel (75 percent), the dime (92 percent) and the quarter (92 percent).

    2009 will mark the 100th anniversary of the introduction of the Lincoln penny. Four commemorative versions will be in circulation until 2010, when the penny will get a permanent redesign. Abe doesn’t deserve be attached to such an annoyance.

    If current legislation holds, in 2010 Abe will be in three places. In addition to the $5 bill and the penny, it will be his turn to be featured on the dollar coin.

    Let’s hope that by then the penny is actually gone and his dollar coin will be sitting in all of our pockets.

    Ryan Johnson is a senior majoring in economics and international studies. He can be reached at letters@wildcat.arizona.edu.

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