Opinion

Pennies no longer worth pinching

I’ve been a server at the Rat for two years, and I’ve learned that nothing is more insulting than a tip in pennies. People leave pennies because it isn’t really like spending money – it’s an effective way to lighten their wallets.

People like pennies, I assume, because they hold sentimental value. Characteristic American phrases demonstrate our affection for pennies: “Find a penny, pick it up, all day long you’ll have good luck,” or “Save a penny, earn a penny.”

And although these sayings are witty, they do not accurately represent how pennies function in our country. Due to inflation and the increasing price of zinc, the penny has become useless and needs to be abolished.

Pennies cost almost double their worth. According to the 2013 U.S. Mint report, quarters cost 10.5 cents, dimes 4.6 cents and nickels 9.4 cents (nickels should be eradicated too). Despite being the smallest denomination of our currency, pennies are the most expensive to make proportionally, at 1.8 cents. A March 2014 article in the Washington Post reported that the mint actually lost $105 million last year minting pennies and nickels.

In addition to being expensive to produce, pennies don’t actually facilitate commerce. Parking meters and vending machines don’t accept pennies, and according to the U.S. Treasury Department, cashiers can legally refuse pennies as a method of payment.

Opponents of getting rid of the penny, such as organizations like Americans for Common Cents, argue that prices would rise if the penny were abolished.

But as economist Ed Dolan points out in his February 2013 article in the EconoMonitor, inflation is caused by macroeconomic factors such as fiscal and monetary policy, productivity growth and exchange rates, not by the size of our currency. A February 2013 article in The Economist reported that other developed countries have abolished their lowest coins and that has had little to no effect on inflation (e.g. Britain, France, Sweden, Israel, Spain, Australia, Denmark and Canada).

President Barack Obama has said, “One of the things you see chronically in government is it’s very hard to get rid of things that don’t work so that we can then invest in the things that do. The penny, I think, ends up being a good metaphor for some of the larger problems we got.”

Americans don’t want to get rid of the penny because it’s traditional, but this tradition stands in the way of progress. We shouldn’t use a piece of currency because we like it, we should use it because it’s an effective way to facilitate commerce. The penny fails miserably at this role, and if we eliminated the penny it would lead to a more efficient currency for our country.

Next time you leave a tip at a restaurant, don’t leave your server pennies, because pennies aren’t a reward for good service, they are a representation of how misguided traditions stand in the way of the development of our country.

Rachel Berquist is a senior majoring in English and psychology.

Featured Image courtesy Pixabay user Olichel

September 23, 2015

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Rachel Berquist


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