The penny works but people no longer use it for rounding and just wind up with more and more pennies. Back in the day cashier would ask for something ending in an 8 so you hand over dollars and 3 extra pennies, change winds up on a 5, get a nickel instead of 2 more pennies. That is why the penny exists, not to buy things with pennies but to round to the next useful coin. Cashiers often look like a deer in headlights if they ask for 2.49 and you give them 5.04, bygone era
Meh. I don’t remember the last time I handled cash - never touch the stuff. I don’t even have to swipe anymore…contactless tap ftw.
Well except that if you are doing it with cards you have to worry about being skimmed. Here in Canada they have chip and pin but guess who gets stung with purchases 4 out of 5 times when it happens because it doesn’t ask for the pin all the time.
Now if you do it through a smartwatch, phone, or some other device that can’t be skimmed when it isn’t being used, then that is the way to do it.
Canada stopped minting pennies ages ago because the metals used to make a penny were worth more than the penny itself
the metals used to make a penny were worth more than the penny itself
Is that where the value comes from?
No, seriously. When you spend a penny - it’s gone. Right? So it’s wasteful to mint a penny that costs more than one cent.
And? That’s true of most coins. It’s probably true of the bills as well.
It’s probably true of the bills as well.
Just FYI you can look up stuff like this at no cost. It’s not even close to being true. A Canadian polymer banknote costs about 20 cents to manufacture and the smallest denomination is $5. Coins cost a few cents to make (even $2 ones). It’s just the penny that lost so much of its value over time that it costs more to make than its worth.
Looks like you’re right about bills. That surprised me in the US though — they use some special hemp-based paper, and they weave in anti counterfeit strips etc etc. but they claim it only costs six cents or so per note.
https://www.federalreserve.gov/faqs/currency_12771.htm
In the US it costs more to make a five cent piece than it is worth. I don’t hear people complaining about getting rid of nickels though. Costs of other coins are climbing as well.
https://money.com/coin-costs-us-mint-solutions/
Coins last a lot longer than paper bills, so the extra cost might be worth it. The US has repeatedly tried dollar coins, but the idiots at the mint keep making them look and feel too much like quarters.
Of course the design costs add in as well, and the mint here keeps redesigning the quarter every year. So if we really wanted to save money, we would stop that nonsense.
As an American I’m down to even go as low as removing dimes and switching $1, $2, and $5 to coins. That puts us at similar currency value for the coin-bill swap as the yen and when I used it it felt about right
Other countries will start removing 5 cent coins in a few decades too (I’m guessing 30-50 years) . It’s only natural when low but positive inflation is targeted by every modern economy.
There are loose plans to do that here in Canada long before that, but nothing solid right now. My guess is they are going to have to move from rounding to the nickel to rounding to the dime and pricing and taxes will have to follow. From when I was a kid a penny and a nickel are worth 1/5th of what they were in purchasing power.
Thanks for this great article. For those who are paywalled you can read it using Archive.IS https://archive.is/20240901230552/https://www.nytimes.com/2024/09/01/magazine/worthless-pennies-united-states-economy.html#selection-1851.0-1885.810
