MIT Physicist Leads Effort to Scrap the Penny
Ever since he was in college, Jeff Gore can recall being annoyed by the penny. Annoyed that it can’t buy anything. Annoyed that it gums up lines as customers fish for pennies. Annoyed that he only gets more of them when he buys something.
“It’s a big, horrible waste of time,” says Gore, a physicist at MIT.
Now Gore, who has become an unlikely national spokesman for efforts to eliminate the penny, is gaining fresh hope that the United States might finally dump the coin. Canada recently announced it would get rid of its one-cent piece by the end of the year even as the US Mint reported it is losing more money than ever to produce the coin.
It now costs 2.41 cents to mint a penny, up from .97 cent in 2005, mostly because of the surging cost of metals. At the same time, the penny is worth less because of inflation - so little that many coffee shops, restaurants, and convenience stores put out “Take a penny, leave a penny” dishes by cash registers.
“It’s basically useless,” said François Velde, a senior economist with the Federal Reserve Bank of Chicago, who has written several papers on small change. “In everyday life, we don’t need the penny.”
But many Americans have a sentimental attachment to the coin. The English language is filled with sayings like “A penny for your thoughts” and “A penny saved is a penny earned.” And polls show most Americans favor keeping the penny.
There’s also a lobbying group to thwart efforts to pinch the penny: Americans for Common Cents. The group is partly funded by Jarden Corp., which received about $48 million from the US Treasury last fiscal year for copper-plated zinc blanks used to make the penny.
Mark Weller, the Washington lawyer who represents the group, argues there are a raft of reasons for keeping the penny, from the coin’s popularity to penny fund-raising drives. Eliminating the penny could spur inflation, Weller added, because many companies could round prices up to the nearest nickel, although others, including Velde, said it would probably have little inflationary impact.
Instead of eliminating the coin, Weller said the US Mint should find ways to reduce the cost of making the coin, such as using cheaper metals and cutting overhead. He noted the penny is not the only coin for which the cost of manufacturing exceeds its value: It costs 11.2 cents to mint a nickel.
“We have to make our coins less expensively,” Weller said.
By contrast, there is no organized lobby to scrap the penny - just passionate individuals like Gore.
Gore, 34, first attracted media attention a decade ago, when, as a graduate student at the University of California, he posted on his website a playful estimate of how much the penny costs Americans in wasted time. His figure: $5 billion a year, assuming it takes 2.5 additional seconds for every cash transaction involving pennies and Americans’ time is worth $15 per hour.
Now an assistant professor at the Massachusetts Institute of Technology, Gore maintains the website, “Citizens for Retiring the Penny,” which features a spinning copper-colored coin and the caption: “Isn’t it annoying?” He has been interviewed by everyone from “60 Minutes” to comedian Stephen Colbert.
“What about Lincoln, sir? How is this in any way different than going back and reassassinating Abraham Lincoln?” Colbert demanded on his cable television show four years ago, alluding to Abraham Lincoln’s face on one side the penny and the Lincoln Memorial on the other. “You might as well shoot him in the head with a penny.”
“The $5 bill will still feature Lincoln,” Gore responded.
“Until YOU get to it,” Colbert shot back.