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Remember when you asked where our taxpayer money is going? Well, in 2018, the U.S. Treasury minted seven billion new pennies.
It cost more than $105 million, at a production cost of 1.5 cents per penny.
Think about that for a second. That’s a -33 percent return, or $35 million lost, not including the cost of transportation or labor. In the grand scheme of things, 35 million isn’t much. But it adds up. A 35 million here, 5 billion there, and soon, a few tens or hundred billion have been wasted.
Talk about a bad investment.
Pennies cause more even more trouble than they are worth — quite literally. With the average hourly wage in the U.S. at more than $22 an hour, the average worker makes 6/10ths of a cent every second. If you take three seconds to stop and pick up a penny, you would be at a net loss, assuming you were on your work shift. Even if you aren’t working, you’re just adding to the extra time you spent handling (useless) pennies every year.
In fact, you would probably be better off if you threw away all your pennies and never saw one again. After all, the average American spends 2.4 hours a year handling pennies. That’s 2.4 hours you could have spent watching TV. Or sleeping. Or working.
Even if you don’t have a job and decide to pick up a penny. You’ll need to find 399 more before you can buy yourself McDonald’s. The fact that the penny was just sitting on the floor should signify how much our society values the penny.
The answer? It doesn’t. As Huffington Post contributor Nick Wing puts it, “It seems like the only reason to carry pennies now is to protect yourself against getting more of them.”
The penny is literally worthless. Vending machines no longer accept it. Its purchasing power is next to none, even if you group them together. Give a homeless man a penny, and he’s no better off. Most people don’t even bother keeping the pennies they get at cash registers — they just leave them for the next person. In fact, some Chipotle restaurants decided to stop using pennies altogether and just round down, even at a loss to themselves. In the end, pennies only provide a net loss for both the government and other people.
Did I mention the environment? Pennies aren’t actually made of copper anymore. Instead, zinc is used. However, the environmental cost of mining and molding zinc is far beyond the value of the penny that is produced.
Then why do we still have them?
Well, the most commonly argued point for the penny is that removing it would result in, “rounding tax,” where stores round prices to the nearest nickel and therefore consumers would have to pay extra. According to a 1990 study by economist Raymond Lombra, this would trigger mass-inflation because the extra costs would bring the Consumer Price Index (CPI) up, which is closely tied with inflation. The study looked at convenience store’s prices and simply assumed that each consumer would buy three items in one visit.
However, another study in 2006 based on actual consumer data, says that consumers would be better off getting rid of the penny. Besides the time factor, consumers would actually make more money than they lose.
Even if consumers do end up coming up negative, the amount would be far from enough to affect the economy enough cause widespread inflation.
Furthermore, all this assumes that people pay with cash. Not only is e-commerce growing, so is the use of a credit card, which have become more convenient and just as, if not more, widely accepted compared to cash. This means cash use has been steadily declining, making pennies even more obsolete.
The remaining reason to keep the penny would be solely for sentimental purposes. Quite simply put, Americans just want to keep the penny. Despite its impracticality, Americans don’t want to say goodbye to the penny and our beloved Abraham Lincoln. But remember, Lincoln is still on the five dollar bill. And in the end, is a cent really worth its tremendous cost?
Next time you see a penny? Don’t bother picking it up.
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