They were made during WWII to save copper for shell casings.
But now they would make sense simply from the fact that it costs more than 1 cent to make a penny.
The alternative mentioned is always how and when to get rid of the penny entirely.
At some point the melt-down value will exceed the nominative value and they will disappear on their own.
But a one-cent coin is still useful for collecting sales tax.
So what’s the downside of steel pennies?
Does anyone in Washington think it would cause an uproar?
It’s a common misconception that these were made during all the war years. In fact they were only made in 1943. Just a nitpick.
I do know the production costs (minus materials) are higher with the steel pennies, as the dies wear out much faster, and the rest of the equipment (blank punches, etc.) is under much more stress. But it’s an interesting question whether or not it would cost more overall.
I suspect that part of it may be fear of consumer rejection - remember that the last time steel pennies were made, the country was wrapped up in the middle of a major patriotic effort of scrimp, save, conserve, and “do anything for the boys at the front so we can beat Hitler and Tojo”. People in general do not like cheap-seeming coinage, and I know I saw at least one study from way back when I was a coin collector where the authors proposed that the cheapness of aluminum coinage in many countries lead to a contempt for the currency of the country.
Steel is harder to coin (stamp) than softer copper which is hardened by the stamping process.
A very workable scheme is to just round whole transaction to the nearest nickel. Items would still be priced to the penny and the cent would still exist as idea but all totals would round up or down according to the ending value.
A load of groceries that costs $156.82 gets charged as $156.80 when the cashier hits the total button.
Everything could still be priced like it is today and the way the rounding takes place means that it has to be a wash for just about everyone (merchants can’t rig the system easily because they can’t predict people’s total purchases).
The penny does not need to exist as an actual coin.
We are aware that pennies no longer have much copper in them, right?
In 1982, the US Mint switched from 95% copper/5% zinc to 97.6% zinc/2.4%copper. Of course, along with many metals zinc is getting more expensive.
Every few years, a legislator or two introduces legislation to eliminate the penny; inevitably, penny lovers appear in droves, and are inevitably noisier than the cool-headed anti-penny folks, and the issue disappears until next time. Which is fine–while I admit that the penny could probably stand to go, I’d miss it if it were gone.
The Wikipedia entry on the penny includes a quick summary of arguments for and against, plus links to pro and anti penny sites, and a mention of the most recent penny elimination legislation.
If we eliminate the penny then the terrorists have won.
There was an article in the New York Times on Saturday about the increasing cost of making pennies. The article said that with the increase in the price of zinc, the metals in each costs about 0.8 cents and there’s additional costs of 0.6 cents beyond that to produce them. The article suggested that the Mint might switch to steel pennies if the cost of zinc rose to the point that melting down pennies for the metal was economical.
No it won’t. It will get charged at $156.85. No grocery store in the US is going to give up that two cents.
Both grocery stores where I shop do.
(They provide a cup from which you can take a couple of cents when you need them.)
Come on. I used to work in IT for major players in the supermarket industry and attended the big-time business meetings. If you want an urban legend, it is that the supermarket industry works on razor thin margins and has to fight for every cent. That is 100% false. They tend to have massive cash, low margins only where warranted, and good business sense. The supermarket industry is one of the most conscience leaders in public perception and effective business practices and has plenty of money just as Wal-Mart does. Efficiency measures almost never lead to directly screwing the consumer in such an obvious way.
Abandoning the penny would mean that virtually all businesses would have to do rounding both directions to make it seem fair. That would just be put out as an standard and everyone would follow. Not following would make a business look like an obvious cheapskate and nobody wants that PR when the better alternative generated the same results as now.
Supermarket Point of Sale equipment is very expensive at up to $40,000 a checkout lane and has some very flexible hardware governed by several different computers. They can be programmed to do whatever you like but that is all done centrally in almost any retail chain. I just can’t see a group of retail professionals who have spent their whole lives figuring out customer satisfaction issues, deciding that they want those few pennies at the end all else be damned. It simply never happens that way for any chain.
I’ve used hard currency exactly twice in the last month. Once to buy a can of pop, once to tip my driver. The merits of pennies seem less and less…well, meritable with each year. With my zero-fee credit card I get 1% cash back on everything I buy, and 5% cash back on many things. I have no incentive to use cash unless I have to, so I could easily go without pretty much most change.
British pennies used to be some sort of copper alloy up until a few years ago, but now seem to be made of steel with a coppery coat, presumably in an effort to lower production costs, as I can see an inflationary scenario where the copper in a penny costs more than 1p.
I have been movng in the extreme opposite direction. I had a landscaper write a bid for my front yard. We agreed on an amount and he asked for a check for half the amount. When I told him I’d rather pay with cash, he came down $50.
When I see an animal as an emergency, I will give an estimate for care. Many “farmer types” will pull out a bankroll and ask how much they need to pay if they use cash. I will usually come down a little, as there is no credit card fee or chance of a bad check.
/hijack
Whenever I see an argument drifting toward the merits of a cashless society, I always have to wonder what you no-cash types have against strippers. What, are they supposed to have swipe card readers strapped to their asses just so you don’t have to carry around a few singles?
If we ditch the penny, there go the penny-ante poker games…
I wouldn’t mind ditching the penny all that much. We’d still have Lincoln on the $5 bill.
The stripper problem is easily solved. All you have to do is have them take money from your credit card or ATM card and they give you scrip worth a dollar each which can easily be stuffed into a g-string.
Because we no longer have ones?