Eliminate Pennies

I’ve been on a campaign for some time to drop a significant digit off our currency.  Instead of $1.19, let’s just make it $1.2.

Even the U.S. Government doesn’t care about pennies, and prefers that you round to the nearest dollar when calculating how much money you owe them (here, for example)

I conducted an experiment in 2005 by seeing how long it would take for people to pick a penny up off the street in downtown Palo Alto. The average length of time? almost an hour. And almost always by children rather than adults. The calories consumed by bending over to pick up the penny are more expensive than the penny itself. (This is not too far from the truth. A 2,000 calorie diet can be had at McDonald’s, along with a Supersize Me health problem, for about $10, or 2 calories per penny.  Nicer fare might cost $20 per day, or 1 calorie per penny.  On average, you consume that penny’s worth of calories in about 45 seconds.)

I also went to the local drugstore, the original home of the “penny candy”. The cheapest thing I could find in the store (and there are something like 20,000 different prices in a large format drug store like Walgreens), was $0.49.

We even have buckets next to the cash register of “need a penny? Give a penny?”

Now, I hear of even more reason to get rid of pennies. The component parts of a penny, the copper, before 1982 or the zinc in pennies made from 1982 on, are worth more than a penny. That’s right, pennies aren’t worth as much as the metal from which they are made.

The U.S. eliminated the half-penny, after all, in the mid 1850s, when it’s value in today’s purchasing power was 8 cents.

There are arguments against eliminating pennies. Arguments like prices will go up by some tiny amount as retailers and gasoline vendors decide they can round up for things. This is just fear of change. When quantified, the effect is small. Economists believe that it would cost the U.S. consumer about $2 per year in rounding error.

Which is probably how many dollars worth of pennies I have stuck in random spots in my house each year – the rounding error in my purchases