Friday, November 17, 2006

Thoughts for Your Penny

Should we abolish the penny? A topic that arises time and time again, taken up in today's WSJ Econoblog. Sure, nothing costs a penny anymore--not even a penny, which costs about 1.23 cents. The debate takes tediousness to stratospheric heights:
The main problem is that pennies waste our valuable time. With American wages averaging over $18 per hour, it takes only two seconds for the typical person to earn one cent. Unfortunately, according to a widely cited study by the National Association of Convenience Stores and the Walgreen's drug store chain, using a penny probably adds slightly more than two seconds to the average retail transaction.

Picture yourself waiting in line to make a purchase. There are, say, three people in front of you and each of them decides to pay in cash and either fumbles around for a penny or receives one in change. If the line's length is constant, each penny use wastes the time of five people. By the time you reach the front of the line this has been multiplied threefold and a half a minute of time has been literally wasted because when you're standing in line you aren't doing what you want to do -- perhaps running back to your own business or getting off your feet at the end of a long day.
I don't know when the last time these economists went shopping, but I can't remember the last time I saw anyone on line anywhere fumbling for pennies. (They usually use debit cards these days.) And receiving a penny is no biggie; shove in your pocket and move on. And anyone who is too busy to spare two (or even 30) seconds of time has bigger problems than pennies, and should probably get a stress test before their heart explodes.

But that's just my two cents. (Doh!)

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