America


A Penniless Proposition


Last February, Canada quit producing its penny. Is the United States next?


V BY NICOLE YORIO JURICK


oters may feel com- pelled to give Congress their two cents when it comes to recent propos-


als to do away with the penny. And according to the U.S. mint, that’s pre- cisely what it costs to manufacture and distribute the one-cent coin. The United States produced 5.8 bil-


lion shiny new pennies last year, and lost $58 million doing it. The loss is a pattern that began in 2007, when the cost of the metal used to make the coin surpassed its actu- al value. So no wonder offi cials are starting to wonder these days whether a penny saved would amount to two pennies earned. In February, the government of Canada stopped producing and distributing the Cana- dian penny. Questions soon arose over wheth- er the United States would follow suit. “The question isn’t


if we should do it. It’s when,” says economist Chip Manning, direc- tor of the Babson Center for Global Commerce in Tennessee. “As a country, we spend 30 million


hours a year fi shing around for pen- nies, which averages out to about 6 minutes a person,” says Robert Wha- ples, an economics professor at Wake


24 NEWSMAX | MAY 2013


Forest University. When it comes to pinching pennies, time is money. With the average U.S. salary now


at about $20 per hour, Americans earn a penny every two seconds. Yet it can take longer than that to stop and pick up a penny dropped on the fl oor. That may explain why people are less likely to bother to pick one up these days. Or perhaps they’re so fortunate they feel they don’t have to bother. But a full 67 percent of those polled want to keep the coin, according to a 2012 report commis- sioned by the pro-penny group, Americans for Common Cents.


“The American


CANADIAN COPPER Finance Minister Jim Flaherty displays the last penny struck.


public has a strong sentimental attach- ment to the coin, and


that’s a big reason why it has stuck around for so long,” says Whaples. For


some, losing the penny really would matter. Some charities could suff er: Since 1994, The Leukemia and Lym- phoma Society has collected 15 bil- lion pennies as part of its Pennies for Patients campaign. The convenience store 7-11 estimates that it donates 1


million pennies per year through in- store charity receptacles. One worrisome sign for the penny: President Barack Obama’s 2012 bud- get called for the Treasury Depart- ment to “change the composition of coins to more cost-eff ective materi- als.” And that has happened before. In 1982, with copper at an all-time


high, the U.S. Mint changed the make- up of the penny from 95 percent cop- per to 97.5 percent zinc, with a 2.5 per- cent copper coating. But whether the pennies could be further downgraded remains to be seen. As much as economists argue that


it doesn’t make fi nancial sense to keep the penny, there is one reason it may continue. The decision to kill the penny has to be made on a congressio- nal level. And at a time when Congress fi nds itself knee-deep in fi scal cliff s and other multibillion-dollar debates, Congress may conclude that saving $58 million by eliminating the penny isn’t worth fi ghting for. But don’t tell that to the 66-year-


old Nevada man who, in February 2007, invested a penny playing Penny Megabucks in Las Vegas. He won $18,799,414 at the Pahrump Nugget, the largest penny payout in history. It is a record that will surely live on even if the penny is lost forever.


PENNY(S)/ISTOCKPHOTO / FINANCE MINISTER/AP IMAGES


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