Pennies made the news this month, as they now cost more than their value to mint. (Nickels do, too.) These costs are blamed on the rising prices of the metals used to make the coins, so theoretically, you might be able to melt down a pile of coins and sell them for more than their face value. (Before you run to the smelter’s, read this article to see why it’s not practical to do so.)
The government’s proposed solution to the high cost of minting pennies and nickels is to change the composition of the coins to less expensive metals. However, some would rather see pennies be eliminated completely. These people have some valid arguments backing them up:
1. A penny has little value and little buying power, especially compared to what it had a century ago, when a first-class stamp cost two pennies and a loaf of bread cost a nickel.
2. Today, anything that costs less than a nickel, such as a minute of telephone communication using a phone card, is sold in multiple units. It’s a rare event to go into a store and spend only two or three pennies. (When it happens, it’s usually because of coupons and discounts.)
3. Coins are heavy and take up more space than paper money worth the same amount. Pennies are the biggest offenders, taking up far more space than they deserve.
4. Perhaps because of the weight of pennies, people tend to hoard them. This tendency was blamed for a penny shortage several years ago. By eliminating pennies, people are more likely to keep their change in circulation, and the mint would not have to make as many coins.
5. Eliminating pennies will save the government the time and money spent minting them.
6. Abe Lincoln already has the $5 bill; he doesn’t need a coin in his honor, too.
7. Counting change takes time, and not having to count pennies would take less time. In fact, the students who recently used pennies to pay for lunches in protest of their short lunch periods might not have been suspended had they been forced to used nickels.
On the other side of the coin (pun intended), pennies have some strong advocates, as well. The website of Americans for Common Cents cites polls that say most Americans want to keep the penny. Pennies are too popular to be ostracized, they say. Beyond popularity, there are other arguments for keeping the penny, arguments as legitimate as those for eliminating it:
1. Eliminating the penny would cause price increases or, at the very least, the perception of price increases. While stores would be able to keep prices ending in cents, most would tend to round prices up. For grocery shopping and other trips that result in many small purchases, even a penny increase on each item would result in a noticeable price difference.
2. For stores that keep pricing at amounts between nickels, eliminating the penny would require people to pay by check or credit card if they want to pay the exact amount they owe. Paying in “exact change” will be impossible.
3. While some stores would round to the nearest nickel, others would automatically round everything up. Some customers would fiercely resent those stores’ practice of rounding up. (Of course, some stores could court new customers by rounding everything down.)
4. Charities that conduct “pennies from heaven” campaigns or rely on change in wishing wells and fountains for donations would see a decrease in funding. Because people value pennies little, they are likely to donate them when asked, even if they wouldn’t normally donate to the requesting charity.
5. Phrases like “pennies from heaven” and “pinch a penny” would fall into linguistic obscurity. Penny folklore and traditions, such as picking up a penny for good luck or making a wish when throwing a penny into a wishing well, would eventually be forgotten. Brides would have to find something else to put in their shoes.
6. We would miss out on a lot of fun.
7. Though it’s already nearly impossible to find, penny candy would definitely be a goner.
Both supporters and detractors of the penny argue passionately for their sides of the debate. Supporters currently seem to be winning, though one day — maybe a just a few years down the road, when even an Atomic Fireball at the old-fashioned candy store costs $1.00 — pennies will most likely disappear from our culture. In the meantime, enjoy those bits of copper (or copper-colored steel, if the Coin Modernization and Taxpayer Savings Act of 2008 passes) in your pocket.
Image courtesy of ButterflySha