I recently spotted a penny on the sidewalk. Unlike most people, I picked it up, because I hate litter. And that’s exactly the problem with pennies: They’re worth so little that they’ve become litter. It’s not worth our time to use them.
It costs about 2 cents to mint a penny, so the government loses money by producing them. However, even if minting costs were zero, it would still be time to eliminate pennies, because our time is valuable and pennies waste time.
The median wage in the U.S. is about $19 per hour, so it takes only two seconds for a typical worker to earn one cent. But using a penny generally adds more than two seconds to the average retail transaction. Suppose that you’re waiting in line to make a purchase with three people ahead of you. The first one decides to pay in cash and either pokes around for a penny or receives one in change. Using the penny has wasted the time of five people (including the clerk). This scene is repeated many times each day. Each instance is pretty