Last night I watched 60 minutes and was intrigued by what correspondent Morley Safer discovered. In Washington, where they literally have the right to print money and where anything under a billion is chump change, there is an ongoing debate over whether it's worth the trouble to keep making cents. Should we make cents? We're talking about those insignificant one cent pieces that you throw as tips into Starbucks tip jars! It may come as a surprise to you, like it did me, that it now costs the U.S. Mint almost two cents to make a penny and almost a dime to make a nickel. If the economy of that eludes you, join the club.
Every year, the U.S. Mint turns out eight billion shiny new pennies, using hi-tech presses that operate faster than the eye can see, stamping out Abe Lincoln on blank pieces of metal. Despite inflation, despite their lowly status, eight billion pennies still add up to $80 million. Safer found out that the trouble is, to get $80 million in pennies, the government spends $134 million; to produce 1.3 billion nickels, as the Mint did last year, costs $124 million, even though the coins are worth about only half that much. How did we get in this fix? Coins are made out of metal. (Click on the video to see how pennies are made) Worldwide demand for copper, nickel and zinc have dramatically increased over the last three years. That's what's primarily driving up the cost of making the penny and nickel. The price of copper has tripled in the last five years; zinc has doubled. Both are in heavy demand, used in everything from electrical wiring to suntan lotion, so both coins are worth less than the metals they contain. But if you're thinking of putting in a backyard smelter and melting down your spare change to make a profit, forget it. The Treasury Department has declared that illegal. That figures!
Every year, the U.S. Mint turns out eight billion shiny new pennies, using hi-tech presses that operate faster than the eye can see, stamping out Abe Lincoln on blank pieces of metal. Despite inflation, despite their lowly status, eight billion pennies still add up to $80 million. Safer found out that the trouble is, to get $80 million in pennies, the government spends $134 million; to produce 1.3 billion nickels, as the Mint did last year, costs $124 million, even though the coins are worth about only half that much. How did we get in this fix? Coins are made out of metal. Worldwide demand for copper, nickel and zinc have dramatically increased over the last three years. That's what's primarily driving up the cost of making the penny and nickel. The price of copper has tripled in the last five years; zinc has doubled. Both are in heavy demand, used in everything from electrical wiring to suntan lotion, so both coins are worth less than the metals they contain. But if you're thinking of putting in a backyard smelter and melting down your spare change to make a profit, forget it. The Treasury Department has declared that illegal.
Although efforts in Congress to retire the penny altogether have failed in past years, its detractors say the time has come. Inflation has rendered the penny nearly valueless, right? If you can’t buy anything with a penny, if it takes at least a nickel or a dime to buy anything, then that individual unit just doesn't serve much good. Stephen Dubner, the co-author of the bestseller "Freakonomics," a zany look at money and American culture, puts the penny in the same category as your pesky appendix and other useless relics. He concedes the country suffers from "pennycitis" - a love affair with the penny that's hard to shake. After all, who's on it but that true American Idol honest Abe Lincoln, who, as a young store clerk, walked three miles to return six pennies he'd overcharged a customer. 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. Say what?
Jeff Gore, a young scientist at MIT says keeping the penny is costing all of us, in more ways than one. 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." He 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. 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. Hell we waste that just pusing the rewind button on our Tivo remote!
So what if it costs more to make it and we waste time using it. It's a penny. An American tradition. You know, I have a penny jar just like everybody else. I still turn those pennies in because they’re worth real money, but usually get charged a fee by my bank (do you believe that?) and of course, Coinstar! We used to say, 'A penny for your thoughts - a nickel for a kiss.' Now it takes a twenty and a ride on Santa Monica Boulevard just for that! Without the penny, charities would suffer. Starbucks barista's would suffer. And how would you tell a waiter that his service really sucked? Most people say they want to keep the lowly penny. 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. Thanks Morley, for the story!![]()
Last night I watched 60 minutes and was intrigued by what correspondent Morley Safer discovered. In Washington, where they literally have the right to print money and where anything under a billion is chump change, there is an ongoing debate over whether it's worth the trouble to keep making cents. Should we make cents? We're talking about those insignificant one cent pieces that you throw as tips into Starbucks tip jars! It may come as a surprise to you, like it did me, that it now costs the U.S. Mint almost two cents to make a penny and almost a dime to make a nickel. If the economy of that eludes you, join the club.
Every year, the U.S. Mint turns out eight billion shiny new pennies, using hi-tech presses that operate faster than the eye can see, stamping out Abe Lincoln on blank pieces of metal. Despite inflation, despite their lowly status, eight billion pennies still add up to $80 million. Safer found out that the trouble is, to get $80 million in pennies, the government spends $134 million; to produce 1.3 billion nickels, as the Mint did last year, costs $124 million, even though the coins are worth about only half that much. How did we get in this fix? Coins are made out of metal. Worldwide demand for copper, nickel and zinc have dramatically increased over the last three years. That's what's primarily driving up the cost of making the penny and nickel. The price of copper has tripled in the last five years; zinc has doubled. Both are in heavy demand, used in everything from electrical wiring to suntan lotion, so both coins are worth less than the metals they contain. But if you're thinking of putting in a backyard smelter and melting down your spare change to make a profit, forget it. The Treasury Department has declared that illegal.
Although efforts in Congress to retire the penny altogether have failed in past years, its detractors say the time has come. Inflation has rendered the penny nearly valueless, right? If you can’t buy anything with a penny, if it takes at least a nickel or a dime to buy anything, then that individual unit just doesn't serve much good. Stephen Dubner, the co-author of the bestseller "Freakonomics," a zany look at money and American culture, puts the penny in the same category as your pesky appendix and other useless relics. He concedes the country suffers from "pennycitis" - a love affair with the penny that's hard to shake. After all, who's on it but that true American Idol honest Abe Lincoln, who, as a young store clerk, walked three miles to return six pennies he'd overcharged a customer. 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. Say what?
Jeff Gore, a young scientist at MIT says keeping the penny is costing all of us, in more ways than one. 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." He 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. 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. Hell we waste that just pusing the rewind button on our Tivo remote!
So what if it costs more to make it and we waste time using it. It's a penny. An American tradition. You know, I have a penny jar just like everybody else. I still turn those pennies in because they’re worth real money, but usually get charged a fee by my bank (do you believe that?) and of course, Coinstar! We used to say, 'A penny for your thoughts - a nickel for a kiss.' Now it takes a twenty and a ride on Santa Monica Boulevard just for that! Without the penny, charities would suffer. Starbucks barista's would suffer. And how would you tell a waiter that his service really sucked? Most people say they want to keep the lowly penny. 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. Thanks Morley, for the story!
