Here's something to think about the next time you see a filthy Abe Lincoln on the sidewalk.
What if the very act of picking up a penny is more financially valuable than the one cent gained? In other words, is the value of a penny so minimal while the direct value of our time so great that it makes more sense to leave the penny alone?
For many of today’s freelancers and members of the gig economy, the answer is YES--spending a few seconds to pick up a penny would be a financially unwise decision. More potential pennies would fall out of one’s proverbial pocket than be placed in one’s actual pocket. The penny is so nominal in value that just a few seconds of time commitment spent picking one up would be financially unsound.
Let’s break it down:
How many seconds is too much of a time commitment to make picking up a penny worthwhile? Use your per hour income as a freelancer to see what your break-even point is. For example, a freelancer receiving $18/hour has a break-even point of 2 seconds.
Picking up a penny every second for an entire hour would give you a grand total of $36.
So for a freelancer or anyone else able to command over $12/hour with their “free time,” three seconds used to bend down and pick up a penny is a losing proposition. A freelancer making the current minimum wage ($7.25) would find their time better spent leaving the change on the ground if the act would take five or more seconds.
This isn’t just an idle thought.
According to a recent study the McKinsey Global Institute, almost a third of American workers now participate in the gig economy. Whether it is done on a full-time basis or more an act of supplementing income, the rise of the gig economy makes the value of “spare time” highly relevant. For many participants in the gig economy, retrieving a penny would be negligible at best and negative at worst.
We have a problem, of course. The dilemma is created by a rise in the direct value of our time within the gig economy, combined with the continuing devaluation of the penny. Applying any free time to generate money is becoming more achievable through on-demand platforms and freelancing sites, while the relative value of the penny decreases with inflation. The average Uber driver, for example, was making $19/hour in the top 20 US markets according to a 2015 study. For that average Uber driver, two seconds picking up a penny outside of their car would be less valuable than two more seconds driving.
Why pick up a penny when you can pick up your phone? The ease of generating income in the gig economy may be making orphan pennies a mere nuisance.
Are you losing money by picking up money? Use your average per hour income as a freelancer, along with the time used to pick up a penny, to find out! Being in the blue is a gain, while being in the white is a negative.
Perhaps the penny is destined to stay on the ground and in circulation. The one-cent has been a part of our currency through private mints since the late 18th century, and made legal tender with the Coinage Act of 1864. The US half-penny was eliminated in 1857. Despite some passionate advocacy for the United States to eliminate the one-cent piece, the penny shows little sign of death. But whether the lowest denomination of currency has been reduced to wasting our time is another story.
There are some who find picking up a penny good luck. Others insist that the one-cent pieces add up, and can send you over some great stories like the Louisiana man who collected pennies for 40 years and cashed them in last year for $5,000. But for those in the gig economy making a decent wage, that may be penny wise and pound foolish.
Persistent as the penny is, there's no doubt its days are numbered – like all our bills and coins. To find out about where money is headed, we talked to Kabir Sehgal.
What if you found out your disaster relief donation did more harm than good? Juanita Rilling explains the humanitarian logistics of unwanted donations, and how you can give in a more informed way.
When we see a disaster strike, it’s a knee-jerk reaction to want to help. It’s possible, however, that despite your best intentions your charitable act may be more of a hindrance than a help. That flies in the face of everything we know about disaster relief – these people need as much as they can, as quickly as they can get it, right? But often our generosity isn’t informed by humanitarian logistics; good intentions can do harm if they lack understanding, as Albert Camus once wrote.
Juanita Rilling, director of the USAID Center for International Disaster Information, explains that disaster relief would never want to push away donations, but she does urge people to educate themselves on the practicality of their contribution.
The complications arise when people donate goods. In disaster environments, there is typically no temperature controlled storage, and often no dry, flat places to store boxes. When food, clothing, and supplies arrive, charity organizations have to risk losing them to factors like mold, rats, snakes, disease and the elements, or pay to put these goods in a storage facility. "All of these resources that are used to manage unneeded donations are being taken basically from survivors," Rilling explains.
There are two sides to every donation: the emotional side and the logistical side. It’s emotionally satisfying to give physical goods, because donors know exactly the impact of their generosity – a truck of shirts to clothe people, boxes of food to feed them, a truck of building supplies to start reconstruction. The best donation, as much as it feels impersonal, is sending cash to reputable and reviewed organization. Rilling recommends using research portals like GiveWell, GuideStar, Charity Watch and Charity Navigator to search for charities that use cash donations most responsibly.