Canadians consider penniless future
There's bigger money than ever in the copper-coloured coin, writes Don Pittis
As a Senate committee studies getting rid of the copper-coloured coin, there's bigger money in pennies than ever. You can make $18 dollars an hour picking them up off the street, for example.
Unfortunately, you're probably not going to get rich — the length of time you actually earn the big bucks is very, very short, given the number of stray pennies lying around. The calculation is simple. It takes about two seconds to bend down and pick something up off the ground. Less if you're quick. There are 3,600 seconds in an hour. So at an hourly rate, during those two seconds, you are earning roughly twice the minimum wage.
After reading a letter to the editor pointing out the excellent financial return, I'm often tempted to pick up pennies. Higher denominations are gold mines. Dimes earn you $180 an hour. I spotted a subway token the other day and after a quick calculation felt like Rockefeller.
The flaw, of course, is that you only earn the big bucks on those rare occasions when you spot a loose coin. The good wages only flow for those seconds you are actually picking the money up, and spending time actually looking for pennies wrecks the math.
People are so convinced pennies are worthless that ordinary folks seem to shower the ground with them. The bad news is that the gravy train may be about to run out.
The good news for penny pickers is that there seem to be a lot more of them around these days. People are so convinced pennies are worthless that ordinary folks seem to shower the ground with them. The bad news is that the gravy train may be about to run out.
The Senate finance committee is now studying whether to rid Canadians of the penny forever.
Don't hold your breath. People have been talking about getting rid of the penny for decades. Twelve years ago, my friend and colleague Robert Lack, now senior producer of the Lang and O'Leary Exchange, filed a report for me on The Money Show about the imminent disappearance of the penny.
Believe it or not, the subject of the importance of pennies to Canadian life has been studied to death. As recently as 2007, the Royal Canadian Mint compiled an enormous survey called The Future of the Penny. The study shows the copper-coloured coin is not something people feel wishy-washy about. Among ordinary folks surveyed, 27 per cent of Canadians were strongly in favour of ridding our shores of the penny. But 18 per cent were strongly in favour of keeping it.
This demonstrates Canadians aren't the moderate-minded people we all thought they were. At least not on the important points. I imagine families torn apart over the issue ("Well if that's how you feel Henry, you can take your gol-darn jar of pennies and use it to rent your own apartment.").
But the clincher is small business. Even back in 2007 a clear majority of small businesses preferred to be penniless. And odds are that number is growing. For retailers, pennies take up time and space for not much benefit. The Aussies and Kiwis have already done away with the coin. The Brits gave their coin a new lease on life by shrinking its size while increasing its value from a penny to a pence.
The argument used to be that businesses would use the disappearance of the penny to round up prices, creating inflation. Pierre Duguay, deputy governor of the Bank of Canada, pooh-poohs the idea. The bank has said the coin should have disappeared in 2005. Duguay told Canadian Press that the impact on inflation would be "non-existent."
Besides, inflation has already done its work. I remember back when I attended kindergarten a penny would buy three blackballs, odd little candies that changed colour as they shrank in your mouth 'till you got to the seed in the middle. Even when I was a teenager, 10 pennies would buy me a cup of coffee. But the fact is nowadays a single penny coin will buy you absolutely nothing.
An argument in favour of the penny might be that it allows retailers to price exactly. But how much exactitude do we need? My mother used to tell me that buying a loaf of bread in the 1930s cost 10 cents. That meant the baker had the opportunity to raise or lower his prices by a minimum of 10 per cent. Currently a penny change in the price of a loaf is a difference of about one three hundredth. Now that is fine-tuning.
Of course in digital form, where most of our money exists these days, changes of one cent can continue to be used conveniently. Even at the grocery store the only place the disappearance of the penny will matter will be in the final tab, and then only if you pay in cash. Digital transfers don't wear a hole in your pocket.
The inevitable loss of the penny will not be without its disadvantages.
Sayings like "a penny saved is a penny earned" will go the way of other archaisms like "Hoist by his own petard." "A penny for your thoughts" and "pennies from heaven" will lead to a 15-minute chat with the grandchildren.
The campfire song I've Got Sixpence will require a double explanation. I mean besides explaining why you are singing rather than listening to a surgically attached iPod.
The origin of "Waiting for the penny to drop" will be even more mystifying than it is already.
I don't know whether kids do it any more, but I remember we used to have blue folders for collecting pennies. Each empty round hole had a date below it, and we would go through our parents' change, imagining the enormous value of a complete set. I remember a friend's got damp and turned green, like a copper roof.
Solid copper pennies disappeared more than a decade ago, but even switching to copper-coloured steel hasn't cut the price enough. Pennies cost more than a cent to make and a whole lot more to keep in circulation.
But even if our law-makers decide to risk alienating the fanatical pro-penny lobby, the coins won't disappear overnight. The mint says taking pennies out of circulation is a big job that, once the decision is made, would take more than a year.
So penny-pickers, keep your eyes peeled. There's still money to be earned.