Penny for your thoughts? Well, it really would make much more sense to give a dime or a quarter for your thoughts, if we are talking value here.
Since 1787, the penny has been serving America as its one cent coin. In fact, it was the first currency that the United States authorized as national money. The penny has a rich history in the U.S., but maybe it is something that we do not need anymore.
To even think about eliminating the precious penny might seem to be a bit anti-American. It was after all, the first, and it is something that, for everyone living right now, has always been around. But why is it still around?
According to the U.S. Mint, in 2013, it cost 2.41 cents to produce one penny. That means that the U.S. government spent almost $169 million to produce $70 million of currency that could actually be used.
A poll conducted by Huffington Post and YouGov showed that 34 percent of Americans would like to eliminate the penny, 51 percent want to continue the use of the penny and the rest were indifferent. If Americans were really concerned with saving money and helping our government get out of the appalling debt we are currently in, those numbers should be switched.
Even our very own President Obama mentioned during an online interview that pennies were archaic and unnecessary. He then alluded to the fact that the only reason the penny was still around was because Americans were too emotionally invested into this coin.
Doing away with the penny would not cost America, well, even a penny. Our government would have over $100 million dollars to spend on much more important things. How about education, safety or really anything else?
Anyone looking at these figures who wanted to use any sort of logic would see that it does not make any sense to continue the creation and use of the penny.
This is not a novelty idea, as many countries have done away with the penny and some even with their nickel, as well. Research done by The Economist shows that Britain, France, Israel, Canada and Spain have stopped the minting of their one cent coin because of the monetary value of the creation of the coin. The coin itself is not profitable in any way.
So what happens when we get rid of the penny? Mass chaos? No, we just use the rounding system.
But that will cost so much more!
No, it really won’t.
Dr. Robert Whaples, professor at Wake Forest University, conducted a study to see if using the rounding system would cost consumers more money, especially those of a lower income class who generally use cash, instead of another form of payment. He tracked transactions of 20 gas station and convenience store chain locations in the South for a week.
“Customers wouldn't lose from rounding our current prices, this data says," said Whaples. "In fact, I found that customers gain just a minuscule amount, about one cent for every 40 transactions, which really amounts to zero. The convenience stores and the customers basically broke even."
Whaples also looked closely at this store in a high class neighborhood and a lower class one. He found that the results were the same, therefore debunking the idea that it would affect people of different socioeconomic classes differently.
One issue that he did find was losing money in purchases that are under $1. "The only group that I found systematically losing is people who pay cash for purchases that are less than $1 with a price that ends in nine, but there just aren't very many of those purchases out there," Whaples said.
What can you buy for under a dollar? If you can even think of anything, it is probably something you do not really need. We should save those pennies and while we are at it, we should save hundreds of millions of dollars.
This is 2015 and it is time to get rid of our penny.
