Hidden costs of eliminating the penny?

[SilverEye]

Has anyone run the numbers on the job losses if we eliminated the penny? From savings at the grocery store and gas station attendants, the business will save counter staff labor not having to deal with them. Armored car drivers not having to haul the heavy worthless bags around, needing fewer trucks and guards. Bank tellers not needing to swap out the penny bags. Also on the production side, that's a lot of mining and refining jobs for the zinc in those coins.

In an age where the gov't is trying to stimulate the economy and simply writing unemployment checks by the millions each month, does it really make economic sense?

[Diggin4copper]

Im not sure if you are joking or serious.....

[creshka46]

No, I get it. That's a good question. I would imagine that Coinstar would get hit pretty hard. I heard somewhere that half of all the coins that run through those machines are pennies.

[stlouiscoin]

very good point, definatly something to consider

[db23]

So seriously, we're going to keep the penny at a production loss to have an even bigger loss?!?! HUH??

I'm assuming that anyone that likes this idea can't wait for Obama's second term.

Even in your scenario, I'd rather write those unemployment checks for a limited time than keep minting the penny at a loss just for the sake of keeping people employed. I think your millions number seems a bit exaggerated, but I guess we'll have to see what happens in Canada. Or we can look back and see what happened in the other countries that already eliminated their cent coins.

[SilverEye]

I'm serious. And yes, there really are millions of people on unemployment.

At least the penny is keeping those people are working, instead of sitting on the sidelines collect a gov't check.

[deacon]

I'm serious. And yes, there really are millions of people on unemployment.

At least the penny is keeping those people are working, instead of sitting on the sidelines collect a gov't check.

This sounds like the broken window fallacy. Basically the story goes that a boy breaks a window. The glazier gets 100 dollars. He then spends said money at the tailor. The Tailor buys bread. The baker buys a cabinet. The carpenter buys something and so on. Without the window being broken, then all these people would not have earned, and then spent 100 dollars. So should we praise this boy? No we should not. The father could have spent the money to replace the window on grocerys, or video games, or silver.

Instead he has to spend his money on fixing the window. What a waste.

So now lets get back to getting rid of the penny. The penny is that broken window. The penny keeps people employed, or we could get rid of the penny and spend the money on something more worth while. Like weapons, or roads, or national parks. Then the gunsmith, or the construction workers, or the park ranger can get paid. They then spend money and so on.

There is no benefit either way. The only (marginal) benefit (to realcenters) is that we have a small coin that we can collect for copper.
http://en.wikipedia.org/wiki/Parable_of ... ken_window

[pennyguy]

I'm serious. And yes, there really are millions of people on unemployment.

At least the penny is keeping those people are working, instead of sitting on the sidelines collect a gov't check.

What we could do, is all the people who lose there jobs from eliminating the penny
Buy them all shovels , Good for china shovel makers.Then hire half of them to dig holes
then hire the other half of them to fill in the holes.Now there are all back to work and we have good aerated
US soil.

[creshka46]

I'm serious. And yes, there really are millions of people on unemployment.

At least the penny is keeping those people are working, instead of sitting on the sidelines collect a gov't check.

What we could do, is all the people who lose there jobs from eliminating the penny
Buy them all shovels , Good for china shovel makers.Then hire half of them to dig holes
then hire the other half of them to fill in the holes.Now there are all back to work and we have good aerated
US soil.

Funny joke:

A guy sees two men working along the side of the road. The first one is digging holes about 2 feet deep every 10 feet or so. The other guy is following behind him filling in the same holes with the same dirt. The observer watches them for a while and finally asks them what they are doing. One of the men replies: "We're union employees that work for the state and we're laying fence posts. Usually we are a three man crew but the guy that sets the posts is out sick today"

[ZenOps]

I dunno. Its fallacy to think that copper and nickel is somehow "not worth the trouble".

Nickel when at $50,000 per ton is actually $1.60 per ounce (and for good reason, as it does require real resources, energy and productivity to create) Iron at $13 per ton might be "not worth the trouble" to be used as money.

If there was actually more productivity in the US, and could actually find a workable nickel mine and get production of nickel out of it - every single piece of steel in the US could be made into stainless steel, or have a hardness rating of that of plated armor. As is, because of unproductivity and extremely (some say artificially low) pricing - you will have to make do with rusty, low strength steel - while trading it off for billion dollar valuations of social media websites.

Is a social media site that lets you say to the world "BRB, I need to take a leak" really worth $100 billion dollars? What is created there?

It really comes down to what you value more at any given time, but it is most definitely not a broken window.

BTW, I hate the decade old steel cored coinage in Canada, once the nickel plating wears off - it can rust in the snow in a matter of months to an indistinguishable piece of metal.

[John_doe]

there will be short term inflationary effects.


jobs lost, i would certainly look in the zinc sector.

[penny pretty]

besides the CENT, what about the impending reduction of ALL physical money? I see it already in kids swiping a debit card for a big gulp and chips, and Ive seen articles on coinflation and such about the upcoming wave of paying by smartphone. Jobs lost in one area might well be offset by the tech jobs that will replace them. or the guy that used to haul pennies will now earn a living as a smelter

[highroller4321]

Has anyone run the numbers on the job losses if we eliminated the penny? From savings at the grocery store and gas station attendants, the business will save counter staff labor not having to deal with them. Armored car drivers not having to haul the heavy worthless bags around, needing fewer trucks and guards. Bank tellers not needing to swap out the penny bags. Also on the production side, that's a lot of mining and refining jobs for the zinc in those coins.

In an age where the gov't is trying to stimulate the economy and simply writing unemployment checks by the millions each month, does it really make economic sense?

Grocery stores, retail stores, restraunts, and most all other industries will need to exact same number of workers. Yes, they will start saving money by not having to pay to recieve and deposit pennies but thats about the extent of it.

The armored car business will lose out of a decent amount of revune because they are not getting paid to wrap pennies. However, there will be no jobs lost because pennies is a very small portion of the overal operation.

Bank tellers lives will be easier by having 1 less coin to deal with but no jobs will be lost because once again its a very small portion of their job.

The other people that I can think of that would get let go would be the people who make the penny at Jarden Zinc.

[highroller4321]

No, I get it. That's a good question. I would imagine that Coinstar would get hit pretty hard. I heard somewhere that half of all the coins that run through those machines are pennies.

Yes 55%+ of all coinstar coin are pennies. However, getting rid of the penny will actually allow coinstar to make more money. Instead of having 50% or more of their bins be full of pennies they can get a lot more total value into the bin. Therefore instead of paying an armored to pick up a $3k bin they can pay that same armored to pick up a $10k+ bin. This also will allow the bins to fill up slower so that they can pay for pick ups less. The biggest savings will also come from them not having to pay to get rid of the pennies.

[tuleja]

Has anyone run the numbers on the job losses if we eliminated the penny? From savings at the grocery store and gas station attendants, the business will save counter staff labor not having to deal with them. Armored car drivers not having to haul the heavy worthless bags around, needing fewer trucks and guards. Bank tellers not needing to swap out the penny bags. Also on the production side, that's a lot of mining and refining jobs for the zinc in those coins.

In an age where the gov't is trying to stimulate the economy and simply writing unemployment checks by the millions each month, does it really make economic sense?

Grocery stores have already gotten rid of more employee's with automated checkout lanes than they ever will by eliminating the penny, should we ban automated checkout lanes? More gas station attendants are eliminated by the gas stations (pay at the pump) policies and credit card machines at the pumps than the penny ever will. I haven't personally stepped into a gas station in over 6 months. Unneeded jobs disappear and others take their place, it's always been that way. Look how many millions of jobs have been eliminated by the computer. The US Post Office will eliminate more jobs in the next 4 years than the penny has ever created. Zinc miners and refiners can learn to mine and refine gold, silver, copper, and the other metal industries which are expanding as fast as they can at the moment.

Unemployment checks are a whole other issue. As long as you pay people to sit on their butt watching TV and eating bonbon's your going to have unemployment checks until they expire and motivate people to get jobs. Every bank I go to has help wanted signs lately. Walmart, McDonalds, and Grocery Stores all have help wanted signs and I live in Michigan, one of the hardest hit states by the recession.

[ZenOps]

For the US I always assumed that if/when you eliminated the penny, you would replace it with the dollar coins. So in essence zero difference (other than you would be circulating copper dollars instead of copper pennies)

The presidential dollars being basically slightly larger pennies (about 2.5x the size) but actually far more efficient and cost saving than $1 bills because of their durability.

Its folly to think that you would be saving much energy at all not shuffling pennies around, when you have to still shuffle nickels dimes and quarters around. I mean: The truck still has to make delivery for chocolate glazed doughnuts, plain doughnuts, and cinnamon buns, even if you get rid of the doughnut holes (the penny)

[SilverEye]

If coinstar didn't make money accepting the penny, they wouldn't take it. What are the fees they charge, like 9%? If they pay 8% to handle them then they are making money.

No one's job will get "easier". They get more efficient. As in, work just as hard, but get more done. What used to be a three man crew of armored car guys humping pennies around just became a two man crew, or now a crew can service 25 stops instead of 20 so fewer crews are needed. Same with everybody else up and down the supply chain.

[SilverEye]

This sounds like the broken window fallacy. Basically the story goes that a boy breaks a window. The glazier gets 100 dollars. He then spends said money at the tailor. The Tailor buys bread. The baker buys a cabinet. The carpenter buys something and so on. Without the window being broken, then all these people would not have earned, and then spent 100 dollars. So should we praise this boy? No we should not. The father could have spent the money to replace the window on grocerys, or video games, or silver.

Instead he has to spend his money on fixing the window. What a waste.

I understand the broken window fallacy, and it doesn't apply here. It ignores the very real role of gov't and it's redistribution of wealth. They guy who had his window broken now gets to claim $100 in tax credit for maintenance and upkeep of his home (or his landlord does). If he didn't have that expense, then the gov't would have levied additional tax on him, add'l tax on the tailor, the baker and carpenter. All to make up for that shortfall of revenue. That revenue is spent on the gov't agents that ensure the boy's parents, the homeowner, and everybody else are paying their taxes. Or just given to the homeless guy sleeping in the baker's doorway.

[highroller4321]

If coinstar didn't make money accepting the penny, they wouldn't take it. What are the fees they charge, like 9%? If they pay 8% to handle them then they are making money.

No one's job will get "easier". They get more efficient. As in, work just as hard, but get more done. What used to be a three man crew of armored car guys humping pennies around just became a two man crew, or now a crew can service 25 stops instead of 20 so fewer crews are needed. Same with everybody else up and down the supply chain.

Coinstar does not make money on pennies. If they take in $50 in pennies they get $4.5 back. They have to give the store 1-3% of that to the store and then pay for the armored to pick up, process, and deposit the coin. The pennies are basically a break even or a loss leader.


The armored carries will still have the same stops. Its very very rare that they stop to just drop off or pick up pennies.

[Madwest]

. . . Its very very rare that they stop to just drop off or pick up pennies. . .

. . . Unless Realcent'ers are involved.

I once topped off a CoinStar kettle with cents. I had poured $471 worth of zincs in and had $150+ more waiting in the wings. I've seen the size of the coin bin in CoinStars and if I had to guess, I'd say that my dump was half or more of its capacity.

My father-in-law was getting a new $700 gas water heater from Lowes and so I went to CoinStar to get the fee-free Lowes card (and get cash from FIL) - I figured I'd give my dump banks a break. I was doing this in a medium sized town (population ~12,000) that had two CoinStar locations. One of them at a Walmart though and so I only had the one option for the Lowes card (Walmart doesn't allow any sort of competitive presence on property and so the CoinStars in Walmart do not offer Lowes, Amazon, etc).

I was there for well over an hour feeding the thing. About every 3-4 minutes the screen would say "My you have a lot of coins. Please wait while we catch up." Anyway, the internal tub filled up and then the machine started throwing cents out the reject. Eventually, a message came up that the machine needed to be serviced. I had to haul the remaining zincs back out to my car and ultimately back home with me because there wasn't another CoinStar in town that would give the Lowes cert.

[RD5]

. . . Its very very rare that they stop to just drop off or pick up pennies. . .

. . . Unless Realcent'ers are involved.

I once topped off a CoinStar kettle with cents. I had poured $471 worth of zincs in and had $150+ more waiting in the wings. I've seen the size of the coin bin in CoinStars and if I had to guess, I'd say that my dump was half or more of its capacity.

My father-in-law was getting a new $700 gas water heater from Lowes and so I went to CoinStar to get the fee-free Lowes card (and get cash from FIL) - I figured I'd give my dump banks a break. I was doing this in a medium sized town (population ~12,000) that had two CoinStar locations. One of them at a Walmart though and so I only had the one option for the Lowes card (Walmart doesn't allow any sort of competitive presence on property and so the CoinStars in Walmart do not offer Lowes, Amazon, etc).

I was there for well over an hour feeding the thing. About every 3-4 minutes the screen would say "My you have a lot of coins. Please wait while we catch up." Anyway, the internal tub filled up and then the machine started throwing cents out the reject. Eventually, a message came up that the machine needed to be serviced. I had to haul the remaining zincs back out to my car and ultimately back home with me because there wasn't another CoinStar in town that would give the Lowes cert.

haha, hard to think one of those things would fill