A Nickel for Your Thoughts

  Jerome Shea       June 25, 2008      Weekend Wonk

Empty your pocket or purse. How much change do you have? I have only 41 cents at the moment: three dimes, a nickel, and six pennies. (I had a bunch of quarters, but I washed the Little Red Beast on the way in this morning.)

I do have a point, which I’ll get to in a moment.

The Advanced Placement Essay Reading, which I wrote about last year (“Summer Camp” and two subsequent wonks), came round again. I just got back from the week in Daytona Beach (the weather was lovely; thanks for asking). And like last year, the question that I spent a week reading managed to tunnel into my brain and take up residence there. This was the “synthesizing” question, which means that seven germane “sources”—op ed columns, news reports, fact sheets—were appended to the question, which was to “write an essay in which you develop a position on whether or not the penny coin should be eliminated. Synthesize at least three of the sources for support.”

The catalyst or jumping off place for this question is the Legal Tender Modernization Act, introduced in 2001 by U. S. Representative Jim Kolbe (R-Arizona). The act, which has never made it out of subcommittee, would not eliminate the penny but would discourage its use by “establishing a system under which cash transactions would be rounded up or down” to such a point that the nickel would suffice as the lowest denomination we have. The nickel would become the new penny.

I’d like to return to Kolbe’s legislation in a subsequent wonk. Meanwhile, the sources went at each other hammer and tongs. A piece on Forbes.com was sympathetic to the idea, fulminating, a la Henry II, “Can no one rid America of this copper-coated scourge?” and lamenting that “these pesky one-cent coins continue to jingle uselessly in people’s pockets.” We also learn that since 1982 the penny has been made mostly not of copper but of zinc (97.5%) with “a little copper mixed in for appearance’s sake.”* (I wonder if this means that—do NOT try this at home!—you can no longer use a penny as an emergency fuse replacement.) Something the sources did not mention was that it costs more than a penny to make a penny: 1.4 cents was the figure I think I saw recently. This calls up the old gag that we lose a little money on each widget we sell but make it up in the volume.

And volume there certainly is! William Safire works himself into a lather over the poor penny and points out that the U.S. Mint churns out a billion pennies a month (maybe…but, tellingly, some of his other figures are suspect). His main point seems to be that inflation has rendered the penny worthless in this day when even the dime store has been replaced by the Dollar Store. At the very least we should be talking about nickel loafers, nickel-ante poker, and so forth. Then there is also a group called “Citizens for Retiring the Penny,” Jeff Gore (yes, many students got him confused with Al Gore), founder. Gore’s main gripe settles on the time that is wasted while the fellow at the head of the grocery queue digs around in his pocket for those last two pennies. Gore’s complicated calculations swell the time lost, nationally and annually, to truly astronomical proportions. Like Kolbe, Gore wants prices rounded up or down to the nearest nickel. That same article, however, introduces us to the super-thrifty Edmond Knowles who, over 38 years, amassed 4.5 tons of pennies, which Coinstar recycled for him to the tune of over 13 thousand dollars. (One figure that stood out for me was that Knowles guessed he’d saved “an average of about 90 pennies a day.” Ninety a DAY? Was he skimming or scamming?)

Back to Safire, who says that two-thirds of the pennies minted every month drop out of circulation immediately, going into piggy banks or getting swallowed up in the sofa cushions. The sofa cushion factoid cropped up again and again. Finally one student—my kind of student—suggested that instead of abolishing the penny we should abolish those dastardly sofa cushions. Mark Weller, the head of “Americans for Common Cents,” did not take Safire’s numbers lying down. Contrary to Safire’s assertion, the European countries have not abolished their equivalent of the penny. Moreover, 66% of pennies do not immediately drop out of circulation. The figure, from a Federal Reserve study, is only about 5.6%–the same as for dimes, nickels, and so forth.

On a positive note for Lincolnphiles, President Bush has signed into law a bill that will redesign the penny just in time (2009) for the bicentennial of old Abe’s birth. Significantly, Lincoln’s bust first appeared on the penny in 1909, the centennial of his birth. The new design will have the Lincoln bust on the head or “obverse” side but the tail or “reverse” side will feature scenes marking different stages in his life. So some of Kolbe’s colleagues want Abe to stick around for another century.

Finally, a Harris poll of about two thousand adults taken in the summer of 2004 shows almost 60% of respondents also leaping to Abe’s defense.

And that is just some stuff to chew on until next week. Should Abe get the boot or should we rally behind him? A nickel for your thoughts.

*I’m of an age to remember the steel penny of 1943, though (ironically) I always thought it was zinc.

Postscript. “Drawback” continues its sad slow slide out of the language (see “On Accident” and “Language, One More Time”). Typically, a student would write, “One serious downfall of Kolbe’s plan is that…” Aargh!