Do Cents Make Sense? Pros and Cons of the Penny
HODA KOTB, co-host:
You've heard the saying "Find a penny, pick it up," but more people may soon be saying, `Forget it. Pennies just don't make sense.' And that's because, according to the US Mint, for the first time in history, it actually costs more to make a penny than the penny is worth. Scott Travers is the author of "The Coin Collector's Survival Manual."
Scott, so good to see you. Good morning to you.
Mr. SCOTT TRAVERS ("The Coin Collector's Survival Manual"): Oh, thanks for having me here, Hoda.
KOTB: Now, since it does cost more to make a penny than the penny's actually worth, does it make economic sense, Scott, to just scrap it and say forget it?
Mr. TRAVERS: Well, it might make economic sense, but, clearly, to millions of Americans, it doesn't make emotional sense.
Mr. TRAVERS: The penny is so much more than just an economic dollars-and-cents issue; it's an emotional one.
KOTB: So you are a pro-penny guy, obviously. They actually did a poll on this to find out if Americans liked or disliked the penny. Fifty-five percent of American say keep it, 43 percent say dump it and the rest don't care.
Mr. TRAVERS: I'm actually neutral on this issue. I understand very clearly both sides--the economic side, where it costs a lot more than a penny to make--probably about 1.2 cents per coin now...
Mr. TRAVERS: ...including production costs and metal costs.
KOTB: Because what's interesting--and I know you already knew this, Scott, but I learned this today--the penny, although it looks like copper, is actually made of a lesser-expensive metal called zinc.
Mr. TRAVERS: Ninety-five percent--excuse me, 97.5 percent zinc and a 2.5 percent copper coating.
KOTB: Can they make this out of a cheaper metal and--so we can hang onto this penny?
Mr. TRAVERS: Absolutely. It could be made out of aluminum. It could be made into a smaller coin.
Mr. TRAVERS: There are ways of doing this and keeping the penny and doing it and making it cost-effective.
KOTB: If they decided to dump it, which some lawmakers have tried—and you either round up or round down to the nearest nickel--how would that work economically? Does that make sense, do you think?
Mr. TRAVERS: That might very well be inflationary, and that's not something that I anticipate is going to happen any time soon.
KOTB: OK. I know they keep trying to push for it.
Now, you talk about this being an emotional issue. Since 1908, Abe Lincoln has been on the penny and this is very meaningful to you.
Mr. TRAVERS: 1909 is the first year of issue of the Lincoln...(unintelligible).
KOTB: Oh, 1909. OK.
Mr. TRAVERS: I mean, this coin is so emotional to Americans. I brought with me a Lincoln cent...
Mr. TRAVERS: ...that's worth $8,500.
KOTB: So that's what a penny--Scott, we're going to have to run on that note. I'm going to take this penny.
Mr. TRAVERS: A penny for your thoughts.
KOTB: Thank you, honey.
Mr. TRAVERS: Thank you so much.