A Nickel For Your Thoughts?

See a penny on the ground and you might just walk right by. Find
one while cleaning and you may even throw it away. Thanks to
inflation, it’s hard to argue that the penny really has any
monetary value anymore. And yet, a heated debate replete with the
hallmarks of good political drama is underway regarding whether the
penny should be preserved or retired.

It wasn’t terribly long after the US penny was first minted in
the late 1700s that people recognized the deflating value of small
currency. The half-penny, minted shortly after the penny, was
retired in less than 70 years. Instead of being phased out like its
predecessor, though, the penny stuck around. In a piece for the
alt-weekly
The Phoenix, Mike Miliard credits the
coin’s staying power to its embodiment of American virtues like
‘frugality and financial smarts.’

Such lofty cultural associations aren’t treasured by all,
though. In fact, nearly a third of Americans support the retirement
of the penny. One of the most vocal anti-penny campaigners is US
Representative Jim Kolbe (R-AZ), who has introduced two bills (in
2002 and 2006) to phase out the penny. Kolbe’s motives go beyond
the banal hassle of being weighted down by useless pocket change.
The copper-coated penny is made of 97.5 percent zinc. The nickel,
on the other hand, is made mostly of copper. As Miliard notes, it’s
Arizona, the largest copper producer in the United States, that
stands to earn big cash by nixing the coin. (Kolbe is also lobbying
for a switch from paper $1 bills to $1 coins, reportedly also to be
made of copper.) Of course, the other side of the argument doesn’t
seem so innocent either. As Miliard reports, ‘the pro-penny lobby
is indeed funded in large part by the zinc industry.’

Instead of focusing on mineral affiliations, anti-penny groups
reiterate that not only is the penny virtually worthless, it’s
actually an economic drain. In a piece for the Georgetown
University newspaper,
Hoya, columnist Eric Rodawig points out
that the value of the penny is so meager that it’s not worth the
cost of making it — about 1.4 cents per coin. In essence, a
50-cent roll of pennies costs 70 cents to produce.

Mark Weller, executive director of the pro-penny organization
Americans for Common Cents (also tied to the zinc industry),
eschews the mineral turf fight for consumer concerns. ‘The whole
idea of rounding to the nickel is a real loser for consumers,’ he
tells The Phoenix‘s Miliard, arguing that rounding will
mean rounding up, which would translate to inaccurate and
higher prices. Over on the anti-penny side, people are cheering for
the demise of the $.99 price tag. Rodawig suggests that ‘stores
would most likely be inclined to change such prices to ones that
end in $.95,’ — to avoid the psychological $1 hurdle — ultimately
saving consumers money.

As both camps hash out the numbers and rally their sides, the
penny appears safely ensconced in Americans’ coin purses and
loafers. President Bush already has signed into law the redesign of
the penny in 2009 in commemoration of Abraham Lincoln’s birth.
Despite the split views on the coin, its new design will celebrate
Lincoln’s efforts at creating a united nation.

Go there >>
Take a Penny, Leave a Penny

Go there too >>
Penny No Longer Worth a Second Thought

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