Should America keep the penny?
Canada recently announced plans to eliminate its penny, but most Americans favor keeping ours -- despite the cost to make it.
This post comes from Brian O'Connell at partner siteMainStreet.
A new report shows that while Canada may be eliminating its penny, Americans don't want to part with their copper. What may be surprising is the amount of money consumers save by keeping the penny.
Recurring surveys -- the latest released today -- by the Washington, D.C.-based Americans for Common Cents shows 66% of Americans favor keeping the penny in the nation's currency system. (The ACC is a consortium of 50 groups that are working to highlight the benefits the penny provides to the economy and consumers.)
But groups like Citizens for Retiring the Penny point to Canada's recent decision to ditch the penny and are lobbying for the U.S. government to do the same thing.
That effort may be an uphill fight, as Americans' support for the penny has remained stable over the years.
Consider the track record of support during the past 20-plus years. In 1990, a Gallup poll showed that 67% of Americans favored keeping the penny in circulation. Furthermore, 62% of survey respondents said they would oppose legislation to keep the penny off the market. In the past 10 years, two bills introduced in Congress that would eliminate the copper currency failed to generate support.
A 1996 report by the Princeton, N.J.-based Opinion Research Corp. found that 73% of Americans wanted to keep the penny in circulation.
That's strong support for the venerable penny, especially amid gathering evidence that eliminating it could cost consumers some serious coin, according to the ACC.
"These results confirm the strong and unwavering support the penny continues to receive from America," Mark Weller, executive director of the ACC, said in a statement. "Americans understand that eliminating the penny would lead to a rounding process and cost them hundreds of millions of dollars in higher prices." (Post continues below.)
The ACC has shifted into high gear after the announcement that the Canadian government had decided to eliminate its penny. The government has asked the U.S. Mint to study ways that could make production of the penny cheaper, but a recommendation probably won’t be out until after the fall election season, the ACC says.
Uncle Sam eliminated the halfpenny more than 150 years ago, and groups like Citizens for Retiring the Penny say the cost of producing the penny means it's high time to take the ubiquitous coin out of circulation, too.
"The halfpenny was eliminated in 1858, when it was worth over 10 times what the penny is worth today," says the CRP in a statement. "Assuming that the timing was correct before, this means that we should have eliminated the penny 50 years ago. The penny is now worth so little that nobody even picks it up off the ground, despite the old 'lucky penny' adage."
The group says it costs the Mint $100 million to produce 7 billion pennies annually, about 33% of which goes to paying for the zinc needed to make the coins.
But consumers may have a vested interest in keeping the penny in play. In the ACC survey, 77% of respondents said they were against rounding cash transactions to the nearest nickel, fearing it would lead to higher consumer prices. "The alternative to the penny is rounding -- something that Americans abhor," the ACC's Weller adds.
For now, any talk of eliminating the penny is premature, even as Canada goes penniless. With bigger economic problems on its docket, don't expect Congress to follow Canada's lead anytime soon.
More from MainStreet and MSN Money:
I am a coin collector, and I love my Lincoln Cents, but get rid of the penny. The 'rounding' issue is not anywhere a big as it's being made out to be. When I buy 1 can of green beans priced at 3/$1.00, I pay 34 cents! That's already rounding up more than half a cent. What a rip off! When calculating interest on a loan, or interest in my bank account- it's posted to the nearest penny. Mutual fund transactions go out to 3 digits for both price and share numbers, but if I sell the whole lot, the result will be paid off to the nearest penny. Plus, the "rounding to the nearest nickel" is only required for CASH transactions, and only for the TOTAL of the transaction, not the individual items. That's the only time that the penny would make a difference. Get rid of the penny- it's too expensive.
By the way, pennies could still be minted for collectors, much in the way that commemorative coins are regularly produced now. They are "real" money, but are not released for general circulation. There is a HIGH markup for special [proof] collector coins- the mint makes a profit on these!
Yes ! Drill a hole in it and use it as a Washer ! It's cheaper than buying an Iron one for 5 cents .
Think about all of the money you save by not buying metal washers and also you help get rid of
those pain in the **** pennies. By the way a penny costs about 3-4 cents to make. Shows you
how much "Cents " the people in Washington have in their brains.
Can you please elaborate on the "econmic impact" you referred to in your closing statement (as one can assume, but I'd like to hear what your thougts are).
Personally, I believe the Pennies demise is a matter of time (as is the legalization of marijuana, and prostitution – gambling in all 50 states, as well); I give it to 2030.
From the sounds of it, I guess for some time we will still be hearing... "Order now for just $9.99 plus shipping and handling..".
From cost standpoint, if it were not cost effective, the Gov would stop producing the penny. As you can see, thru the past 3 decades, the material has drasically changed. Now, the penny almost looks like its made out of some type of plastic... (not like back in the day, when you threw one off of the Empire State Building... todays pennies would float upwards...
So I guess the question beggs: Cost effectiveness or Economic relivance.
Remember, back in the day the was a 1/2cent coin.
Copyright © 2014 Microsoft. All rights reserved.
ABOUT SMART SPENDING
LATEST BLOG POSTS
If you worry about money after the streetlights come on, these actions may help you rest easier.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'