Once Again, Americans Lose All Cents

While the attention of the financial community has been riveted on the performance of the stock market and the meaning of Alan Greenspan’s last sneeze, the crisis in pennies has gone largely unnoticed. And why would anyone notice? Who pays attention to pennies? Pennies get so little respect that they are given away in dishes near cash registers and forced to exist as stupid ornamentation for their namesake loafers.

I was once in a meeting with a bunch of supposedly penny-pinching finance folks, who were talking about one of those accounting things that can instantly turn you into a sleepwalker, and one of them characterized $9 million dollars as "insignificant." All I could think was that this guy must be a tipper to behold. If dollars are insignificant, what are pennies? But then, this reflects the mind-set of government and business. When was the last time you saw an annual report that rounded off to anything less than thousands, or a government initiative that ran into the hundreds? I have no doubt that at this very minute, some government task force is trying to figure out a way to do without pennies. Even with a relatively new recipe that includes hardly any copper (pennies today are made from zinc, slag and Crayolas), they are expensive to manufacture. They are the ugly stepchild of coinage. People who will stoop to pick up litter won’t stoop to pick up a penny. I guess my accountant friend wouldn’t stoop to pick up $9 million.

So I thought it was kind of poetic justice this summer when the lowly penny stood up to us and said, "I AM somebody!" For the second time this decade, we have lost our cents in a penny crisis. This severe shortage of pennies threatens to pour sand into the gas tanks of retailing and banking. It turns out that a lot of people actually value pennies. When they get a penny, they keep it. Our overall saving rate may be the lowest in the industrialized world, but we are the envy of the planet when it comes to saving pennies. Although tens of billions of pennies are in circulation, at any given time only about 300 are in banks and cash registers nationwide.

During the last penny crisis, it got so tight that in secret meetings, grim-faced retailers spoke about the very real possibility of having to end the one-cent sale. (Earlier penny crises were the death knell for penny candy, a burden that fell largely on nonvoting children.) To pry precious pennies from the copper-smelling hands of the cent-hoarding population, banks have offered to buy a dollar’s worth of pennies for $1.10. How we all wish we had converted our sluggish investment portfolios to pennies to capture that instant 10 percent gain! (One bank reportedly was giving unscrupulous customers $1.10 in pennies until executives realized the folly of that practice.) This made me curse the day some years ago when I cashed in many years’ worth of saved pennies for cheap, plentiful dollars. It served me right. My main use for those pennies was to put them in a bucket in the trunk of my car, where their combined weight gave me better traction in the snow, adding a new twist to the expression "Make your money work for you." It is impractical to accomplish the same effect with dollar bills.

Other than commuters in snowy climates, the people who most revere pennies are retailers. It’s hard to price fast food, for instance, so that the items add up to multiples of 5 or 10, although I’ve heard that retailers strive to do that because it puts fewer mental demands on the change-making employees.

It seems that many fast-food workers think that "math" is a fold-out piece of paper commonly found in glove compartments. I first suspected a shortage of intellectual firepower in fast-food workers when I noticed that one restaurant had illustrations that showed workers how to assemble a hamburger: bun heel on the bottom, burger material in the middle and bun cap on top. I don’t want to unfairly ridicule the intelligence of either fast-food workers or bankers. My purpose here is simply to point out the vital role of even the least-respected of our currency and to state that, based on actual tests, it takes at least $4 million in paper currency to give equal tire traction.

Dan Danbom doesn’t have change for a quarter.