Monday, February 4, 2013

Farewell to the Penny


"Find a penny, pick it up, and all the day you'll have good luck."


Sad penny face
links to: forgetthebox.net
I seem to be in the minority here, but I find it almost indescribably sad that the Canadian penny is on the verge of being lost to history forever. The last Canadian one-cent coin was minted on May 4 of last year and today the Royal Canadian Mint officially ended its distribution of pennies to financial institutions. Today also marks the day that independent businesses will begin to stop accepting or giving out pennies at points-of-purchase; some of them will be reprogramming their systems to automatically round up or down each sale to the nearest nickel but most will do it the "old-fashioned way" for the foreseeable future: cashiers will calculate the rounding in their heads and hilarity will most likely ensue. The government claims it will save $11 million per year by no longer minting these bronze beauties (and you know the Harper Cabal never lies about financial figures) but the cost to us as consumers and business owners in the immediate future, at least, will easily rival that $11 million savings. In the first place, it will likely cost businesses collectively hundreds of thousands—if not millions—of dollars to reprogram their check-out registers to round everything to the nearest nickel. Try to imagine a scenario where those costs are not passed down to the people who shop there; I'd be very interested in hearing from you if you are successful. The businesses that do not choose to go this route (at least at first) will cause some pretty impressive bottlenecks at their checkouts while harried front-line employees who are already under pressure not to make mistakes with their tills try to work out "rounding rules" in brains that haven't had to calculate a total since they were seven years old. Frustrated customers who leave those stores and vow never to return may become a pretty serious problem not too far down the road.


Penny murderer Jim Flaherty
But both of those scenarios presuppose that the businesses in question have some high level of scruples, because there are no rules governing how to handle this Brave New Penniless World. That's right: the government that decreed that the noble penny would no longer be available decided it had absolutely no interest in working out the logistics of how that might apply to the real world. In the finest Neo-Con tradition, businesses will be left to their own devices to figure out how much money they can make from the new financial reality, because they don't have to "round" at all but merely set up their machines to raise any fraction of a cent up to the nearest nickel. And we'll go along with that, because we always do, and scarcely notice the insidious bleeding of the extra few cents per transaction. If a "Mom and Pop" business decides to go this route, scarcely anyone would blame them; however, consider McDonalds Canada, who serve an average of 2.5 million customers every single day. If they were to calculate everything up to the nearest nickel instead of rounding appropriately, they would gain an average of two to two-and-a-half cents on every transaction. Two cents times 2.5 million transactions equals a gain of $50,000 per day. Their changeover, if they went this route, would pay for itself in a week or two. It's all speculation, of course, but because there have been no rules set down for the transition I think we can be sure of one thing: it's not the common folk who will be benefiting from the move.


Just plain loafers, now
I'm not a big fan of the "it costs more to make than its value" argument, either. It's just bad logic, to my mind. Find a way to make it more cheaply if you need to—hell, make it out of plastic if you want: it's not like any vending machines even take pennies anyhow. But even if you can't get the cost of making a penny work out to less than one cent each, it's still not relevant to the "value" of the coin. And, unless some genius comes up with a magical method for stopping inflation forever, inevitably there will come a time (maybe a long time from now, but it will come) where every single one of Canada's coins will cost more to make than it is "worth". That's just a mathematical fact: if prices rise but the face values stay constant then every coin has its own "point of no return". What happens then? Do we return to beads and shiny stones as a method of conducting commercial activity? Where do we draw the line?


"What's a penny?"
But, as I mentioned in passing in my Groundhog Day post, the biggest single reason I am upset over the loss of our penny is this: I am a math and numbers geek. Our dollar is made up of one hundred pennies. That's what it is, by definition. If the pennies are gone, the numbers above it become no longer rooted in reality and start to lose their true concept. We don't count by fives on a regular basis, because it's not how our numbering system works. As I posted on Facebook today, eliminating "ones" from our counting base just makes me "itchy". I know other countries have done it; I don't care. When I am told that something is a whole made up of one hundred parts but then I find that the parts in question don't actually exist, it gives me a kind of mathematical vertigo that I really don't enjoy. I'd actually be better with all of this if we passed a law that our dollar was worth "twenty cents" from now on and, at the same time, started calling our nickels "cents". You know, now that I have written that idea out, I actually feel better. Why don't we start calling our nickels "cents" and redefine the Canadian dollar as "twenty Canadian cents"? I may have to start a petition calling for that action.

Because, seriously: I guarantee you it would be a hell of a lot easier than teaching everyone under forty years old how to do math in their heads.

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