Say goodbye to the penny
The act eliminating them is a pun:
The House of Representatives voted to send the smallest piece of US currency the way of the dodo on Monday, passing the bipartisan Common Cents Act in a unanimous vote.
In addition to blocking the Treasury from minting any more pennies save for collector coins, the bill would also set up a framework for cash transactions to be rounded to the nearest 5 cents, in order to eliminate the need for pennies altogether.
When was the last time you used a penny? Now they cost too much to manufacture. So begone!
When I was a kid, penny candy was actually a thing. We went to a little news store that had many bins of it and made our choices carefully. But that’s when a candy bar usually cost a nickel.
I remember debating this with my roommate almost 40 years ago. His argument was that stores would round everything up to the nearest nickel. My argument was “Who cares?”
Pennies are long overdue to be eliminated, and they only lasted as long as they because of zinc industry lobbyists.
Another bit of childhood disappears.
Back in the day, I’d spend my pennies on baseball cards. You’d get one card and one stick of gum for a penny. And buying five penny ones was a better deal than one nickel pack, because that way you’d get the same number of cards but five sticks of gum rather than one slightly bigger one.
I seldom pay for anything with cash anymore — I think that’s true of most people. When I do, it’s for something that costs less than a dollar or two. (Or at my local laundromat, where the machines only take quarters.)
On the other hand, I still want the choice to pay in cash to be available to me.
I think Covid accelerated the move to a mostly cashless society, where the cash option is available, but most shoppers don’t choose it. The ubiquitous points or x% cash back also helped, and I know it’s a great motivator for my own purchases.
So with less cash transactions on the consumer side and increased costs on the govt side this was inevitable.
I remember when the local store still had penny candy, and I remember when they eliminated it. I think it just got to be too much trouble to stand behind a row of candy jars, waiting for some kid to make up his mind. I was very disappointed!
One more: a small local store sold a Popsicle for a nickel, but would break it in half, and sell you half for three cents. How can it possibly have been worthwhile to do that?
Along the same lines, a box of caps (remember those?) was a nickel. We found a way to make a mini-firecracker out of one roll of caps, and somehow managed not to injure ourselves, or set anything on fire. You felt wealthy if someone gave you a quarter.
I guess I have officially entered oldfogeyhood.
Was surprised yesterday to see that quarters have misc tributes on the back, and are so light they seem like play money.
I had stopped using cash due to inconvenience of change. Had not realized it had been so long.
Credit card pays3% and is convenient. Downside, for young people, is more difficult to realize the relative value of a dollar. If they charge something, it almost feels free. If they paid with a hundred dollar and only got 60.00 back, they would learn something. And, tv ads do make credit cards seem as if they will make your dreams come true.
Suspect I am not the only one to scour the streets for discarded coke bottles back in the day.
2 coke bottles would get you a three Musketeers and a penny for the gumball machine.
I have upheld the following proposal of mine for many, many years now, and for me it grows more and more relevant with each passing year.
Back when the USA Mint minted gold pieces, the $10 gold coin was called the eagle. ($5 gold coins were half eagles, and $20 gold coins were double eagles.)
My proposal is to replace the dollar with the eagle. No, forget about gold content or gold backing, those long ago went the way of the horse and buggy.
But move the decimal point in our currency one place to the left, so that, for example, $32.50 would now become ‘E’3.25, and so on, where ‘E’ is my spur-of-the-moment symbol for Eagle, analogous to $ for Dollar.
It’s not a terribly big deal, it’s just my proposal to keep magnitudes under control.
— — — — —
The nickel can either stay or go away. Back in the 19th-century day, we had half-cents and things worked out pretty well until they were no longer needed. Ditto for the nickels under my ‘E’ regime.
(In fact, back then, there were half-dimes that contained 5¢ worth of silver, just as dimes contained 10¢ worth of silver. Then, mid-century or so, what we recognize as nickels made their appearance. I could go on about other USA coins, but I won’t.)
A lot of countries have gotten rid of the “penny”. Some round both down (2 cents to zero) and up (3 cents up to 5).
Going cash less is fine if you want too. I use MC for most everything, down to the $1.60 hotdog at Sams. But I have been burned lately by getting a service charge when I use MC. My Car Dealer does that when I get car serviced. P’d me off. So next time, I will write a check and cost them the processing fees.
Nickels also cost more than 5 cents to produce. Maybe they’ll come up with a way to bring down the cost (cheaper metals).
The question is what to do with all the hundreds or thousands of pennies laying around now. As I understand it, even before this cancellation, banks wouldn’t take them unless they were in rolls. I’m inclined to think the government should take them back. Maybe have lots of machines that you can pour the pennies into and get quarters or dollars back.
My daughter is Penny ! Short for Penelope.
I am sick of prices ending in “.99” So let’s get rid of the penny and get back to round numbers.
Now they’ll end in “.95.” Deflation!
And yes, let’s all praise inflation. It is built into the Great Scheme under which all Americans must live. The Federal Reseve has 2% annual inflation as its benchmark. Less is bad, more is bad. So in less than 50 years your assests have doubled in face value, but so have items for purchase. It is bizarre. I personally would favor another depresssion, to reset values at a lower level.
The low value of our cash is partly (largely?) caused by the weenies at the Fed. Res. saying that 2% or 2.5% annual inflation is just fine. Then, of course, we have bursts of inflation after Nixon and Biden that are much higher than that. Holding gold seems so anachronistic, but I think it is a legit way to compensate for flaky currency.
PS: I think Trump not watching the supply chain carefully during COVID and the greenies, especially in CA, going after diesel truck emissions (supply chain again) also contributed to our recent bout of inflation.
________
Yup. Cicero has got the picture. F___k 2%!
There’s a reason why the price is always set at say $9.99 instead of $10.00
Psychologically, we subconsciously view it as more $9.00 than $10.00 because the first number before the period is subconsciously, foremost in our evaluation of the cost. And logic and reason has nothing to do with the 75% of us who buy on fear or greed rather than cold logic. This is why if a $100.00 item is on sale @ 25% off it’s listed as $69.99 rather than $70.00. Count on it, the public is going to notice and conclude that everything is going up in price even more than before, regardless of the actual reality.
As for inflation, our fiat money system views inflation as a feature not a bug. It allows a society to run up a nearly unlimited deficit*, allows political leaders to ‘kick the can down the road’ and give the peons their bread and circuses.
* Of course, the bill always comes due but being the world’s reserve currency greatly delays reality.
When I was a kid you could still put them in gumball machines and parking meters.
Today’s dime (cost ~6¢) will be the new penny … unless it’s the quarter (~12.3¢). Probably not too far in the future but “they” will slip it to us slowly like they’re doing with the penny. Need a “unit” measure. A penny is “one” of these; now a nickel is “one” of these – we just call it “five”.
Geoffrey Britain (6:17 pm) said:
“There’s a reason why the price is always set at say $9.99 instead of $10.00. Psychologically, we subconsciously view it as more $9.00 than $10.00 . . . .”
For what it’s worth (not a whole lot), I do not and I never did. My wife did — note that I wrote “did” — but after years of sporadic correcting, whereas at one time she would have remarked about a $17.99 item, “look, it’s only 17 dollars,” now she will remark that the item is 18 dollars. A small victory, at last. But it’s taken a lot of effort.
Same should be done with nickels.
I use them pennies all the time in the grocery store. Their cash-payment machines take them nicely, and my pile of pennies is shrinking.
we subconsciously view it as more $9.00 than $10.00
What do you mean, ‘we’? It’s been clear to some of us since the 1950s that $9.99 is bait for dummies, and the price is ten bucks.
@fullmoon: Suspect I am not the only one to scour the streets for discarded coke bottles back in the day.
2 coke bottles would get you a three Musketeers and a penny for the gumball machine.
________________
Quite so.
On Saturday mornings a childhood friend and I would hunt for pop bottles to redeeom. We would stop when we had enough for a burger and shake at the local drug store soda fountain. It took a few hours.
A burger and shake never tasted sweeter!
Halcyon days …
I bet we had 5 penny candy stores within a half mile.
They didnt last long.
They taught you how to budget
1 dollar? baseball cards or candy cigarettes?
the long skinny licorice whips were a given
and then ride bikes all day
It’s a reminder that government policy has been witlessly tolerant of inflation. The usual argument for that (among Keynsian economists) is that inflation is needed to reduce real wages during recessions (because employers during the 1920s ceased to reduce nominal compensation when business was bad). If that’s the case, why not promote among businesses the practice of including in employee compensation a bonus which is a function of last quarter’s earnings (something Japanese employers do) ? And, if that’s the case, why not expand the monetary base during those quarters where the unemployment rate exceeds a certain level? And why not remove elements of state and federal labor law which promote labor market sclerosis? (E.g. excessive minimum wages, Wagner act collective bargaining, anti-discrimination law, and lumpy compensation plans?),
Art Deco’s comment sounds somewhat similar to the idea I have had to help adjust labor hiring/ firing during ups and downs in the business cycle:
1) publish a normal business schedule/scale of salary vs. role/responsibility, presumably gaged to general market levels as to skill, similar work scope, etc.
2) publish a schedule of bonuses adding to the normal scale when business is good. Generally people with the higher levels of responsibility for the gains (managers, executives, professionals) would gain more vs. general admin or other employees, but all would see some sort of gain
3) correspondingly, publish a schedule of income packet reductions when business goes down. Again, the managers, executives, and professionals suffer the greater proportional loss as the folks who did not manage to manage all that well after all; and many of the lower paid people see no loss at all.
Still allow for firings for cause and for RIFS of deadwood and low productivity people. This is generally advised in any case since doing so helps the productive stay focused and not be sidetracked making up for the negative impacts of the poor performers. Perhaps wait for a clear good stage in the business cycle before hiring any replacements for those fired in this class.
Making as much of this scheme public as possible helps everyone realize whatever their skills, duties, job scope, or organizational discipline, they are all contributing to the success of the business; … or not.
The world of HR is kind of funky so I don’t know what rules or situations would preclude implementing something like this.
that $9.99 is bait for dummies
==
Perhaps that’s marketing. I have a suspicion the original utility of the practice was to compel cashiers to ring up every sale.
Eastman Kodak used to have a system of standard bonuses. Lester Thurow and SH Hanke are two economists who had an interest in the practice back in the day. One thing you might do is to calculate corporate earnings as they would be if everyone received as compensation only wages, salaries, fringe benefits, piece rates, and commissions. You allocate a sum of 15% of this figure to distribution of standard bonuses. Every employee is assigned a number of shares after six months on the job and altering the number of shares an employee is due requires a certain advance notice (say, two quarters). The mean number of shares per FTE is by law 4.0. Every employee receives at least one share, no single employee may receive more than 45 shares and no group of eight employees may receive more than 132 shares. One’s bonus is calculated per the most recent quarter for which the accounting is complete and paid out in installments through the coming quarter with a lump sum granted for the unpaid balance if the employee departs the firm.