Back in 2012, the long-existing “lucky penny” disappeared from the public circulation because it cost more to produce than it held in representative value. Now, according to an article from the Globe and Mail, economists are predicting the same fate is lined up for the nickel. Retiring the nickel could result in drawbacks and benefits for society. In a follow up article, the Globe and Mail cites senior economist Hendrix Vachon speaking about the removal of the nickel, claiming it will benefit the economy, and will make money payments and transactions more reliable and efficient.
No one likes change at first, and sometimes, it may not always be a positive move. Pennies and nickels are arguably low in value, and sometimes meaningless. However, I do still like to use the nickel in dollar store transactions, and exact change is always nice. The positive side of disbanding the nickel is the absence of a weighed down coin purse, where it is hard to locate bigger change and easy to confuse the nickel with the quarter while paying a transaction.
The rounding off of change would go from a five cent interval to a 10 cent one. This could be great for a sale, and bad for owing change. Vachon suggests getting rid of the nickel in a few years time, and introducing 20-cent and 50-cent pieces to replace them, which in some ways could be better for businesses in the sense that it may be easier to count out change.
The idea of changing an old economic system like ours can be perplexing, to say the least, with so many adjustments made to accommodate the absence of the penny. Rounding up or down will be felt more by both sides of a business, and it won’t be one or two cents difference anymore.
To illustrate this point, say, for example, the total change due at a grocery store is $11.14. In this case, instead of getting $11.15 back, one will only get $11.10 in return. If you are owed $11.16, you’d receive $11.20. Therefore, the repercussions of the jump from a nickel to a dime will be felt a lot more strongly than the penny.
Adapting to a new system takes time, and a lot of adjustments, with a little bit of grumbling along the way. Not only will the value of the quarter go down to accommodate the removal of the nickel, but the possible introduction of the 20- and 50-cent pieces will take getting used to. This is especially true for the older generations, who are so used to pennies and nickels being a part of the economy. A positive factor is that direct deposit, cheque, credit, and debit transactions should not be affected by this change.
As a citizen, I remain skeptical about the absence of the nickel. As a human being, I am prone to grumble about the change, since I am not completely adaptable all the time, but new systems have a way of making change work in favour of our society, and all it takes is time and patience. So, this could be a good or bad move for our economy, and only time will tell if this new system could work. Since the fall of the penny, we can no longer say “lucky penny” anymore, and with the possible removal of the nickel, our busy beaver will slowly disappear from circulation. Eventually, the government will likely try to phase out as many coins and bills as they can, and one day we will be a cashless society (but that will probably take a very long time to achieve). Having said that, I remain curious to see what will happen next, and hope for the best.
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