Future Uncertain for the Penny

Nov. 2 -- Silverton, Ore., is a Norman Rockwell kind of town where one penny still buys 12 minutes of parking.

However, as the old penny meters wear out, they are being replaced with digital machines that accept only nickels, dimes and quarters.

Little did Silverton politicians know that when they made the decision to update their meters, they entered a debate not just about penny parking meters, but about whether pennies themselves are worth saving.

"To tell you the truth, I didn't give much thought to pennies until this whole penny meter issue came up," City Manager Bryan Cosgrove said.

Not Worth What It Used To Be

The penny has been part of American currency since 1787, but it literally isn't worth what it used to be because today it's 98 percent zinc. Only 2 percent of the coin is the more expensive copper.

The national mint makes 13 billion pennies a year. And one government report claims they cost more to produce and distribute than they are actually worth. When the city of Silverton eventually removes its last penny parking meter, there will be one less place in America where a single penny will buy something.

Rep. Jim Kolbe, R-Ariz., has introduced a bill to get rid of the penny.

"You can't use it in a phone," Kolbe said. "You can't use it in a parking meter. You can't use it in a gumball machine."

Dealing with the penny at all is a waste of time, and therefore money, according to a University of California-Berkeley graduate student who calculated a tongue-in-cheek formula for what the penny costs the American economy.

Jeff Gore says it takes 2 ½ extra seconds for every cash transaction involving pennies. At a rate of $15 an hour for every American's time, according to Gore, pennies waste $5 billion every year.

But the penny is a sentimental favorite among charities and nonprofits that depend on people to collect and donate them.

There's also some big money politics over the little coin. Kolbe wants the penny to go away so Arizona, that nation's biggest copper producer, can sell more copper to the National Mint for use in dollar coins, which also are under fire for being under-used.