Thursday, April 14, 2011

WHY I HATE PENNIES, pt. 2



The fact that pennies even exist has been proven impractical, in multiple studies, and even in law. In 2007, a New York City man persuaded a state senator to draft a bill requiring pennies to be accepted everywhere and at all times, the bill was not passed. While federal law states that coins are legal tender, it does not compel anyone to accept them. If a business doesn't want to take pennies it has a legal right to refuse them, which is only more of a reason that they can be referred to as “useless”. In 2008, 5.4 billion pennies were produced. That's more than twice the number of quarters minted and five times as many dimes. The penny accounts for roughly half of all coins minted within a year. About 1,000 pennies are made per second. The average price for zinc has shot up from 35 cents a pound in 2002 to 63 cents a pound in 2005, and still rising. According to http://www.metalprices.com, the November 16, 2010 London Metal Exchange, which is the world's largest market in contracts on base and other metals, price for zinc per pound is $1.0251. February 28, 2008, Rep. Zack Space stated that, "Given the current cost to make a penny and volume of pennies minted, simply reducing penny production costs to face value, the United States will save more than $500,000,000 in the next ten years alone". Approximately 10 million shiny new pennies are punched out every day by government workers, who could be more useful doing anything else. They cost more in employee hours than it would cost to toss them out. There were 2,354,000,000 pennies minted in 2009, and going by this number, $1,577,180,000 were wasted last year alone, calculated by the excess cost of a penny, 0.67¢ multiplied by how many pennies were minted in 2009.

If pennies were eliminated, stores would have to round prices to the nearest nickel. A study conducted by Robert M. Whaples, an economics professor of Wake Forest University has analyzed 200,000 transactions from 20 locations of a gas station and convenience store chain across seven states (Alabama, Georgia, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia), and he concluded that consumers would not actually suffer. Purchases at gas stations and convenience stores are just as likely to come to $7.02 as $6.98, so the rounding up and rounding down would cancel themselves out. On average, shoppers would lose nothing, averaging about 1/40th of a cent per transaction. "It's time to eliminate the penny," said Whaples, who estimates that the United States loses roughly $900 million a year on penny production and handling.

Money was created to have a common medium to facilitate the exchange of goods and services, and as shown, pennies do not serve that function. The obvious solution to make a penny less expensive is to change the composition of the coin, integrating cheaper metals or perhaps even plastics, which some European countries have done with their currency. In 1943, at the peak of World War II, the US Mint coined pennies in steel, in response to wartime demand for copper for ammunition, so as proven in history, pennies can be made with cheaper materials but for an unknown reason the government will not change the metal composition. I propose that a cease production of all United States pennies begins immediately, and for all current public circulating pennies to be returned to a United States mint or other refinery and refunded for its metal content value as oppose to its face value until our government can find either a cheaper metal to make pennies with, or to cease production permanently of the clearly useless coin.

Many highly creditable sources, including Harvard professors and nationwide associations, shows that eliminating the penny would not pose a great cost to an average American when purchasing anything, would be immensely more convenient and would save billions of dollars a year to put toward more efficiencies that our country is currently working toward, but cant because of lack of funding. In addition, the United States’ economic situation is in a very poor state right now, and by losing up to $1.5 billion to perpetuate the production of a money piece that can easily be done without, we do not have the time, nor the funds, to keep things the way they are. This is a serious issue that needs to be addressed; the penny needs to be stopped to create a better future for our entire country.

27 comments:

  1. Penny's are worthless. If I'm ever a few cents short of change, cashiers never care about it. I think pennies should just be eliminated.

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  2. i feel like you spent a lot of time on this if you want my 2 cents. get it cause it would be 2 pennies and you dont like pennies i am sooo funny

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  3. I think most people would agree with you, but big businesses which control alot of politics would not. Unless you let the businesses keep the remaining change. If you think of hundreds of thousands of transactions, if a business might be losing 2-4 cents on every single one, it does actually add up, especially the larger a business is. So that's the only way I believe it would work, if you got the people to agree to let the businesses have the extra change, and then that means the businesses would be making MORE profit, giving them reason to support such a bill.

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  4. Continuing hate for copper currency.
    =D

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  5. Yea pennys are very worthless such a waste of metal

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  6. I wonder how long it is going to take the US to rid itself of pennies..

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  7. @andrewsith
    probably a while!
    even if they stop making pennies they would still be in circulation... which kinda sucks cus eventually they would become a rarity and probably gain some kind of value. like a 2 dollar bill!

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  8. This comment has been removed by a blog administrator.

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  9. Cool post keep the updates coming. Currency is a very interesting topic.

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  10. Goddamn. Glad somebody shares my hatred. Being a waiter, I see them too often strewn about the restaurant.

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  11. And again, lucky me that I don't have to use them (:

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  12. I wonder how many pennies are in landfills?

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  13. but you collect them and then go to a bank to exchange and suddenly you have free money!

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  14. Thats so many pennies being made, such a waste in my opinion in copper.

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  15. Do your civil duty! Swallow them, ofc!

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  16. i hate pennies because i have none

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  17. That's crazy how many they make a year. Huge waste!

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  18. While overall I understand what your saying and for the most part I agree, but when your talking pricing on things 1 cent can make a significant difference in profits on a large scale. Now I understand that this isn't about pricing or marketing, but it would be interesting to maybe hear about how many people use pennies (vs other forms of payment) towards costs that would require a penny to pay. anyway...

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  19. The long awaited sequel! keep this up!

    www.themanscave.org

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