Is It Finally A Good Time To Kill The Penny? Some Say It Is
SARAH MCCAMMON, HOST:
The U.S. has a coin shortage. And as Planet Money's Greg Rosalsky reports, the shortage could be new fodder for an old movement - the campaign to kill the penny.
GREG ROSALSKY, BYLINE: Banks and laundromats are scrambling. Arcades and gumball machine operators are bracing for the worst. Members of Congress are asking for answers.
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JOHN ROSE: I received a call from a bank here alerting me to the fact that they would only be receiving a small portion of their weekly order of coinage.
ROSALSKY: That's Congressman John Rose questioning Federal Reserve Chairman Jerome Powell last month about the coin shortage.
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ROSE: Chairman Powell, I wonder, are you aware of this issue?
JEROME POWELL: Thank you. Yes, I am aware of it. I'm very much aware of it. What's happened is that with the partial closure of the economy, the flow of coins, it's kind of stopped.
ROSALSKY: So that's reason one why it might be hard to fill the parking meter these days. With the economy partially closed, there aren't a lot of quarters flowing around. Reason two - the U.S. Mint - they shut down production this spring to protect their workers. Bottom line - for at least a little bit, you might have trouble finding quarters, dimes, nickels and pennies. But what if the U.S. Mint stopped making one of those coins - a coin that accounts for more than half of all the coins they make? The penny - the penny is pretty much worthless. Actually, it's worse than worthless. It costs the U.S. Mint about 2 cents to produce every penny.
ROBERT WHAPLES: So for a long time, the U.S. Mint has been taking a loss on pennies.
ROSALSKY: Robert Whaples is an economist who has long argued that pennies aren't even worth our time. He even did the math. He calculated that the typical American worker earns about a penny every two seconds which, if you think about it, is like less than the time it takes to even find a penny.
WHAPLES: You got to fumble into your pocket and, you know, check out your coins and get that penny out. And so if you wasted a couple of seconds getting your penny out...
ROSALSKY: It's probably not worth it. Now, killing the penny isn't exactly a new idea. Former Congressman Jim Kolbe spent decades trying to do it.
JIM KOLBE: Because it was a logical reform that would have saved the U.S. government a lot of money...
ROSALSKY: But Kolbe faced resistance from special interest groups like the company that supplies the penny blanks used to make the penny and from his colleagues like the speaker of the House in the early 2000s, who was from Illinois.
KOLBE: Illinois is the land of Lincoln, so Illinois was not too anxious about getting rid of the penny. So our bill never got (laughter) much of a hearing at all.
ROSALSKY: In the years since, other countries, like Canada, have gotten rid of their one-cent coins - but not us. Now when Kolbe goes to the store and is handed a worthless hunk of metal with Abe Lincoln's face on it, he says...
KOLBE: I'm bemused as much as anything by it because I think it is a good illustration of the problems that we have in our legislative process.
ROSALSKY: Last year, the U.S. Mint lost over $72 million making pennies. But there doesn't seem to be much urgency about this because in the grand scheme of the multitrillion-dollar federal budget, that's just pennies.
Greg Rosalsky, NPR News.
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