Should We Make Cents?

Morley Safer On The Bizarre Economics Of Producing Money

(CBS)  At work, Gore does research in biophysics. But away from the lab, he's a fearless crusader against the penny, arguing that if time is money, the cent is senseless. "I read somewhere that two or two and a half seconds are wasted per cash transaction as a result of the use of pennies. And I started thinking, you know, that doesn’t sound like very much, but you know, maybe it starts adding up if you do the calculation," he says.

Gore has devised an Einsteinian equation of productivity to determine how much time America wastes dealing with pennies, counting them out in stores, giving them back in change, fishing them out of the couch and putting them in penny jars.

"You come out to a wasted time of 2.4 hours per year per person which actually is quite a lot," Gore explains.

And with wages in the country averaging $17 an hour, that means pennies are costing each of us $41 a year. "And you multiply that by 250 million adults in this country, you come out to ten billion per year, which is quite a lot of money," Gore says.

Of course, if you put a price tag on lost time, that’s nothing compared to the time America wastes in traffic, on the Internet, and having to listen to imperfect strangers talking on their cell phones. Still, the debate over the penny is one into which everybody puts their two cents worth. Or call it four cents worth.

"I mean, if you ask Americans, 'Do you want to keep or abolish the penny?' most people say they want to keep it. Now, I would argue that those same people would have said they want to keep the rotary telephone. They wanted to keep, you know, carbon paper. They wanted to keep the buggy whip. But you know what? We've done all right without all those. And I think that if the penny were no longer around people would be okay," Dubner argues.

"Americans may differ on what the utility of the penny is. I know when I go home, I have a penny jar just like everybody else. And, but at the end, I still turn those pennies in because they’re worth real money," Moy says.

"You as an amateur coin collector, I suspect you’re in favor of keeping the penny in your heart of hearts. Yes?" Safer asks.

"Well, as a public official I have no private opinions. But I do know that a lot of people are attached to the penny," Moy replies. "And as long as they continue to being in demand, the mint has an obligation to continue making them."

In fact, the mint is in the process of redesigning the back of the penny to mark two milestones next year: the 200th anniversary of Lincoln’s birth and the 100th anniversary of the Lincoln penny itself. Get rid of it? Not likely.

[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.