Penny Pinching

On Sunday 60 Minutes had a story about how expensive pennies are, in production costs and time wasted. The first argument: It costs almost two cents to produce one penny; 8 billion pennies are produced each year, or $80 million worth. So let's say there's a $70-80 million loss in making them. That's a drop in the ocean of the federal budget, but it's an argument to get rid of it unless its utility outweighs its costs.

But then there's the second argument: it is estimated that counting pennies add something like 2.5 seconds per purchase transaction, and that comes out to about two hours a year that a resident in the U.S. wastes at the store counter. Whether that's a large or small number is relative. Again it suggests perhaps we're better off without the penny, particularly because it doesn't buy anything.

But here's where it gets ridiculous: they multiplied that time by the average hourly wage of Americans ($17/hour) to estimate that pennies cost the economy $10 billion in year of lost productivity.

Except, people don't usually shop when they're on the clock. They usually shop in their free time, in their off-work hours. So I don't get where the "lost productivity" comes from. People probably lose much more than two hours per year waiting in line for price-checks, people who didn't slide their debit card through the machine properly, etc. A lot of free time is "wasted," or dribbled away, in waiting around. It doesn't mean they would have spent that time being "productive" and helping the economy.

I'm not sure what value the penny serves anymore, though perhaps once we conquer inflation there might be some nickel items that will fall in price to four or three cents. This story will, however, remind me to stop adding up the coins in my pocket and giving the cashier exact change. Cashiers spend more time counting up my coins than they do giving change back from the register. Like everyone else, I'll start throwing my coins in a jar at home, or unload them in charity jars.

Also, it affirms my resolve that, if I ever open a retail establishment, it will be penny-free. Prominent signs will display that pennies will neither be accepted nor given in change, and all items will be rounded down to the nearest nickel.