CORRECTION: A friend tipped me off to the composition of the Canadian penny. It's not made of copper - just copper plated. According to Wikipedia, the current penny being manufactured by the Royal Canadian Mint is 94% steel, 1.5% nickel, and 4.5% copper plated zinc . However, up until 1996, the penny was produced from 98% copper. Just looking at material cost from the market, the pre-1996 penny is worth about 1.5 cents in material ($6.10 / kg of copper and around 2.5 g of copper in a pre-1996 penny). The currently manufactured penny in raw material is worth about 0.14 cents. However, the Mint estimates it costs 0.8 cents to manufacture each penny (though some estimate the real cost is up to 4 cents each). Even at the Mint's estimate, that means that it costs the tax payers about $800,000 in manufacturing the penny to represent $1 Million in currency through pennies. It's still not worth it.
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The last time pennies were worth so much was in 1983.
If it were legal, we'd be able to melt down our pennies and pay the commodity price for copper. Just looking at the raw material, pennies (at least the Canadian ones) are worth at least 50% more as copper. Pennies are a blight on savings for many reasons. First of all, saving pennies takes up valuable real estate in our saving jars, wallets, and purses and makes us less organized. Secondly, pennies probably cost tens of millions of dollars a year to process and slow down many cash transactions. Think of those times someone in front of you paid with pennies and multiply that by tens of thousands of times everyday.
Pennies also make tracking our purchases more difficult. Sam Walton knew this, that's why he put prices to the penny in ways that would make it difficult to calculate: $2.37, $14.33, $21.67. $42.79. Rounding these to the nickel would make it just a little easier to calculate our mega-purchases.
However, pennies have a deep symbolism when it comes to being thrift. There's a real satisfaction in being able to use all the pennies on our person and finally be rid of them. Yet, we feel lucky when we find a penny on the ground. Sometimes we hope that it "rains pennies from heaven."
More related to thrift, just like we as a society waste huge amounts of money maintaining currency in the form of pennies, we individually waste huge amounts incrementally maintaining some legacies that are no longer of significance to us. It could be that newspaper that we could get for free at work anyways, the magazine subscription we don't read, the specialty channel that we never watch, the ski pass that we use only once a season, the cellphone plan that could have been replaced with a pay-as-you go. We hold on to things because we think they have significance when they really don't. They are like huge penny jars. Melt these away and we'll start accruing real value.
