Should We Make Cents?

Morley Safer On The Bizarre Economics Of Producing Money

(CBS)  But its fans say a penniless America would leave the penniless truly penniless, because merchants would round prices up to the nearest nickel.

Mark Weller is the voice of "Americans for Common Cents," a pro-penny group that claims that rounding up will cost Americans $600 million a year. "You’re going to be hurting those that can least afford it. The folks that don't have checking accounts, that don't have charge cards, are the ones that are gonna get hit," Weller argues.

He says without the penny, charities, too, would suffer, on the theory that people are less likely to donate as many nickels. As it is, penny drives around the country collect tens of millions of dollars a year for medical research, for the homeless, for education. "You have school groups all over the country that are raising funds for important causes on Katrina relief or new computers or other issues for their schools," Weller says.

But as Weller freely admits, he's got a financial interest in the high cost of penny pinching: Weller is a lobbyist for Jarden Zinc, the Tennessee company that sells those little blank discs for the mint to turn into Lincoln pennies.

"If you don’t have the penny out there, it would be a major kick in the pants to the zinc industry, wouldn’t it?" Safer asks.

"I think if you look at overall uses of zinc in the economy, this is a smaller part of that overall. I think if you look back at the merits of argument which is what happens if you don't have the penny and you round transactions to the nickel, that's a loser for charity groups, that's a loser for the American public," Weller says.

And on the contention that rounding to the nickel would force prices up, mint director Moy says Weller may have a point. "We've taken a look at the studies of countries who have gotten rid of the lowest denomination coin. There's always at least a one-time inflationary hit upwards," Moy says.

"Prices have a habit of doing that, don't they?" Safer asks.

"People are generally in the business of trying to make money," Moy says.

But the business of making money - literally - isn't all bad. The cost of producing most currency is far below its face value. Paper money for example - ones, fives, tens on up - cost six cents each to print. Only the penny and nickel are big-time losers.

"The nickel you can argue about. And maybe it helps, maybe it doesn't. But to me, the penny is just obvious," says Jeff Gore, a young scientist at MIT who says keeping the penny is costing all of us, in more ways than one.

[wpkelpfroth]

1. How about the fed shrinking the money supply, thereby making the penny and all other coins more valuable?
2. The fact that a coin costs more to make than the face value misses the point. The coin may last over several thousand, perhaps millions of transactions, so the price of a coin per transaction is very small compared to the intrinsic value of the coin.

[cabird1]

In addition to the aforementioned state and local taxes increasing by a nickle instead of pennies, don''t forget that bread, milk, all grocery staples and the gallon of gas will increase by a nickle each time those corporations "need" more money. With few or no pay raises on the horizon for lower and middle class citizens, the economy WILL be in dire straits. If your''re upper class, you''ll have some income to fall back on, but for the majority of citizens, how will they ask for a pay increase of 5 cents an hour everytime bread OR milk goes up?

[schs1966]

Your story on the penny missed the mark. The penny is the most important coin our government mints. The penny is the method local and state governments us to extract millions of dollars from Americans via sales taxes. I am surprised you and your author expert missed this point.

[ellenspencer]

My %u201Ctwo cents%u201D on the Penny:
Before viewing this segment, I too held a rather unappreciative attitude toward the lowly penny. After thinking about it, however, I was amazed to discover just how prevalent pennies are in my life.
The day before viewing this show, my family and I played Tripoley together and pennies were quite necessary. Then, on the morning before the show I stopped by my classroom to add some pennies to our %u201CPennies for Peace%u201D jar. That%u2019s where we save the %u201Cinsignificant%u201D coin in order to help build schools for children in Afghanistan. Finally, just an hour before the show, I stopped at the local office supply store and bought two hand sanitizers that were on sale for a penny each.
Clearly, this shiny little coin is still significant to me and the next time I use one, I%u2019ll be seeing a %u201Cpretty penny%u201D indeed.

[ackthp]

The "Should we make cents" story was a low point for 60 minutes. This story, as was told, was irrelevent. Was there nothing of greater need of air time than this so called story? The producer of this segment forgot one important point in signing off on this story. With the proposition to do away with the penny and round up prices to the nearest nickle, one must take into account state sales tax rates. Let''s take for instance an item rounded up from $4.99, would now be $5.00. No pennies needed. When this item is purchased in Colorado (2.9% sales tax), the purchase price would be, $5.14 (no pennies needed?). In Missouri (4.225% tax), your price would be, $5.21, and in Texas (6.25%), your price? $5.31.
60 Minutes has taken and stuck its head in the sand. With a segment such as this poorly researched one was, this renowned news-magazine has joined the tabloid journalism world of unworthy of air time stories. Please 60 Minutes, stop pandering to the "reality-tv" zombies, and go back to journalism, and relevent news.

[maikeru823]

The US military overseas doesn''t use pennies to save money. This has been going on for at least 5 years. Transactions are rounded either up or down to the nearest nickel. It can be done!

[knraf]

Interesting thought on the penney. Why don''t we just move the number values up a notch and make the penney the nickel, the nickel the dime and the quarter the half- dollar?

Come on CBS. You know d*** well we cling to the penney so the money grubbers can stick .99 on the end of any price. Are they gonna round up from .99 to .00?? Don''t think so.

[ibcjman]

Great commentary on the cost and rational of using the penny. The young mans formula of what it is costing all of us was feasable up to the point that if we were to pay that 10 billion in pennies it would in fact cost us all "20 billion dollars"
Keep up the great work!

[Dliefling]

Maury,
Maybe it is time to copy South Africa where we only have a 2c piece now and so much easier to rather have 2-2c pieces for change than 4 of your 1c pieces! We did away with the penneys long ago!

[msjesse1]

Don''t hate the penny, just pass them on to me.

[karmenu-2009]

Has anyone figured out that pennies could be minted out of recycled plastics at a penny a dozen? and can probably be minted much cheaper in China?
Carmel Gaffiero

[edp2064]

Am I the only one that noticed that nobody brought up the issue of taxation? What are we going to do for local, state and federal taxes when it comes to the purchase of consumer goods? Something tells me that the government is not going to round down to the nearest nickle.

[revdrdark]

The solution is obvious--we should mint them in Mexico!

[hcunn1221]

The US Mint should be prohibited, effective immediately, from manufacturing any coin at a loss.
("Nickels" could be made of steel.) That would solve the penny problem.
For collectors and artists, however, the Mint should make beautiful copper pennies to be sold at a modest profit (2 cents each?).
--Hugo S. Cunningham

[karagmile]

$800 million a year? It''d be cheaper to send free coin rollers (those plastic numbers banks use) to ever address in the country with a note to return pennies in jars & drawers to the bank. It''d cut the minting cost about in half... It''d also require actual sense in DC, which is rarer than a pre-Lincoln penny.

And minting $1 bills is crazier. _Half_ the Bureau''s time is spent minting $1s, which last 18 mo, rather than $1 _coins_, which last 20 yr. Canada (home...) had the sense to switch, & _take the $! note out of cicrulation_, which is why the U.S. attempts at $1 coins have all failed--the _note remains available_... (Don''t suppose that''s from the lobby for the ink & paper companies, do you?)

[karagmile]

$800 million a year? It''d be cheaper to send free coin rollers (those plastic numbers banks use) to ever address in the country with a note to return pennies in jars & drawers to the bank. It''d cut the minting cost about in half... It''d also require actual sense in DC, which is rarer than a pre-Lincoln penny.

And minting $1 bills is crazier. _Half_ the Bureau''s time is spent minting $1s, which last 18 mo, rather than $1 _coins_, which last 20 yr. Canada (home...) had the sense to switch, & _take the $! note out of cicrulation_, which is why the U.S. attempts at $1 coins have all failed--the _note remains available_... (Don''t suppose that''s from the lobby for the ink & paper companies, do you?)

[karagmile]

$800 million a year? It''d be cheaper to send free coin rollers (those plastic numbers banks use) to ever address in the country with a note to return pennies in jars & drawers to the bank. It''d cut the minting cost about in half... It''d also require actual sense in DC, which is rarer than a pre-Lincoln penny.

And minting $1 bills is crazier. _Half_ the Bureau''s time is spent minting $1s, which last 18 mo, rather than $1 _coins_, which last 20 yr. Canada (home...) had the sense to switch, & _take the $! note out of cicrulation_, which is why the U.S. attempts at $1 coins have all failed--the _note remains available_... (Don''t suppose that''s from the lobby for the ink & paper companies, do you?)

[shanesax]

No need to eliminate the penny! BUT smart businesses should round DOWN my final bill.
e.g. at the super market my bill of $121.53 shold be billed at $121.50

Many small businesses already have ''Leave a penny - take a penny'' containers at their check-outs. They KNOW the value of a penny in public relations. Other businesses have a charity container that the let the customer put their small change into. Why not double the customers donation from the rounding DOWN (in the super market example)and get a HUGE corporate public relations bang for a few pennies.

All I care about is NOT having to dig for a penny and NOT having to accept one.

We shouldn''t be worrying about how much the penny and nickle are costing to make. It''s a trival matter compared to the billions spent on the War In Iraq.