Readers Use Plastic (Debit/Credit) For Most Purchases

You may have heard the phrase “Cash is King” before, but it doesn’t refer to paper or coin currency:

The belief that money (cash) is more valuable than any other form of investment tool. The “cash is king” phrase is typically used when prices in the securities market are high and investors decide to save their cash for when prices are cheaper. It can also refer to the balance sheet or cash flow of a business; a lot of cash on hand is normally a positive sign, while strong cash flow allows a company more flexibility in regards to business decisions and potential investments. (Investopedia)

Currency is being replaced with plastic and digital money, just in time too:

In 2013, the cost of making pennies and nickels exceeded their face value for the eighth year in a row. The cost of minting a penny stood at 1.8 cents, nearly twice its face value. Nickels cost twice as much as dimes – 9.4 cents vs. 4.6 cents – despite being worth only half as much. (The Washington Post)

How does this compare to paper currency?

Each year, the Federal Reserve Board projects the likely demand for new currency, and places an order with the Department of the Treasury’s Bureau of Engraving and Printing, which produces U.S. currency and charges the Board for the cost of production. The new-currency budget for 2014 is $826.7 million, and reflects the following costs per denomination: 

• $1 and $2 = 5.4 cents per note
• $5 = 10.1 cents per note
• $10 = 9.2 cents per note
• $20 and $50 = 10.2 cents per note
• $100 = 13.1 cents per note (source: Federal Reserve)

A nickel costs more to make than a dollar and ten dollar notes? Over $800 million per year to create the physical currency some use?

As of July 2013, currency in circulation—that is, U.S. coins and paper currency in the hands of the public—totaled about $1.2 trillion dollars. The amount of cash in circulation has risen rapidly in recent decades and much of the increase has been caused by demand from abroad. The Federal Reserve estimates that the majority of the cash in circulation today is outside the United States. (Source: Federal Reserve)

Many still use cash, but the numbers are shrinking:

The national telephone survey of 983 adult U.S. credit card holders found that 1 in 3 usually uses a credit card or a debit card for in-person purchases of less than $5. The breakdown: 11 percent prefer credit cards, 22 percent debit cards, 65 percent cash.

But the generational divide is striking. A slight majority (51 percent) of consumers 18-29 prefer plastic to cash, the only age group to do so. A preference for cash becomes stronger in each advancing age bracket, until at age 65-plus, 82 percent prefer cash. (CreditCards.com)

Here’s another look:

While credit and debit cards represent more than half of the purchases made for retail goods and services in the U.S., cash continues to dominate in small transactions. A recent consumer survey conducted by the Federal Reserve found that cash represented 66% of transactions under $10 and 58% of transactions under $25. When the transaction was more than $50, cash was used in less than 20% of the payments. (Wall Street Journal) 

It was the above statistics on cash use that prompted the poll last week, here are the results:

Q: What size purchase would you use cash versus plastic (debit/credit)?

1. No amount, I use plastic for most purchases 49 [55.06%]
2. Cash for $20 or less 13 [14.61%]
3. Cash for $5 or less 11 [12.36%]
4. Cash for $10 or less 9 [10.11%]
5. Any amount, I use cash for most purchases 6 [6.74%]
6. Unsure/No Answer 1 [1.12%]
7. Cash for $15 or less 0 [0%]

The results make me wonder if location (urban vs suburban vs rural) has a role in cash vs plastic use? Income & education level? Include me among the 55% that use plastic for nearly every purchase, regardless of amount. I just know I rarely have more than $5 in cash on me, only for emergency stations or the occasional retailer that doesn’t take plastic for sales under some limit.

Despite the shift away from cash, using plastic is far from perfect. Last year many of us got new card numbers after the data breach at Schnucks grocery stores. Since then we’ve seen data breaches from nationwide retailers like Target, Neiman Marcus, and recently Home Depot.

That’s the risk of using debit & credit cards, right? For the moment:

Beginning later next year, you will stop swiping the credit card. Instead, you will insert your card into a slot, just like people do in much of the rest of the world, where the machine will read a microchip, not a magnetic stripe. You’ll still be signing for the time being, but the new system also enables the use of PIN numbers, if card issuers decide to add them to their cards.

The U.S. is the last major market to still use the old-fashioned swipe-and-sign system, and it’s a big reason why almost half the world’s credit card fraud happens in America, despite the country being home to about a quarter of all credit card transactions. (Wall Street Journal) 

Yes, we’re the last to use swipe-and-sign. I remember the 80s well when we used carbon slips to get impression of the face of cards, before the back magnetic strip was common.

But this type still isn’t the latest. Soon cards will have a chip imbedded allowing customers to just tap the card at retail stores with appropriate POS (Point of Sale) systems, my Ventra card for Chicago’s transit system has a chip and can be used as a prepaid debit card as well.

Alternatively your physical cards won’t be used, your phone will store the information and use NFC (Near Field Communication) to communicate with the store’s POS. Interesting times ahead.

— Steve Patterson

Apartment Parking Garages: New Vs Retrofit

Apartment projects, by their nature, have a greater density than neighborhoods of detached single-family dwellings. A century ago few parking spaces were needed in apartment projects, but now at least one parking space per unit is expected. Parking garages are often the answer to parking needs in urban areas.  This post will look at two current examples: a new project under construction and a 1950s project adding a garage.

Recent new construction projects like 3949 Lindell have a highly visible attached parking garage, but there’s a better way — placing the garage in the center so the building conceals it.

Lining the perimeter of a parking garage with residential units is a great solution for new construction, but what about existing buildings? With old warehouses, such as my loft, parking is usually placed within the existing building footprint. The same usually doesn’t work for 1950s urban renewal apartments. So what do you do? Plaza Square was an urban renewal project that started with a 1953 bond issue, the six buildings opened in 1962. Only one has underground parking.

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Jefferson & Russell Intersection Improved, Far From Perfect

A year ago I posted about a need to improve the pedestrian experience at Jefferson & Russell (map), see Jefferson Avenue Needs A Road Diet, Corridor Study Part 1.

It’s a small start, a few low-cost improvements until a new streetscape can be planned and funded. For those who cross Jefferson at Russell these are welcomed changes.

— Steve Patterson

Poll: Are Body Cameras For Local Police Worth The Expense?

Since the deadly police shooting of Michael Brown more than a month ago police departments here, and elsewhere, are now considering body cameras. For example:

A panel of Minneapolis officials has approved a $170,000 pilot program to place body cameras on 36 police officers.

A Minneapolis City Council committee authorized the pilot Monday. It directed city employees to report back on questions including how the success of the six- to nine-month pilot can be measured and independently reviewed.

The city has pledged another $1.1 million for the camera program next fall. The full council is set to finalize the pilot plans later this week. (CBS Minnesota)

The cameras are $300-$400 each, but storage & management systems are costly. It adds up:

The cost to outfit the city’s police force with body cameras will come with a price tag of $1.2 million — and that’s just the start.

Richard Gray, the city’s public safety director, told an aldermanic committee on Tuesday morning that the department would need an additional $500,000 to cover labor and maintenance costs, plus an increase in the department’s annual budget of about $800,000 to $900,000 for replacement and maintenance costs. (stltoday)

As the headline indicates, the poll question this week is: Are body cameras for local police worth the expense?

— Steve Patterson

Remembering Sculptor Carl Milles (1875-1955); 75th Anniversary of Aloe Plaza Next May

Aloe Plaza, across Market from Union Station, was many  years in the making. President of the Board of Aldermen (1916-1923) Louis P. Aloe had championed a 1923 bond issue that included razing buildings across from Union Station to create a more attractive way to welcome visitors arriving by train.  Aloe died in 1929 but his widow continued his vision, from the city’s former website on Aloe Plaza:

Edith Aloe, Louis P. Aloe’s widow, became acquainted with the work of the Swedish sculptor, Carl Milles, at an exhibition of modern art held by the St. Louis League of Women Voters in 1930. The idea of commissioning Milles to build a fountain in Aloe Plaza grew out of her enthusiasm for his work.

But the country was in the middle of the Depression so her idea was put on hold until January 1936 when Mrs. Aloe gave a dinner in her home for the sculptor,Carl Milles, and members of the St. Louis Art Commission. She officially presented her check for $12,500.

The City signed a contract with Milles in 1936. Milles designed and cast the bronze statues for the fountain in his studio at the Cranbrook Academy of Art, Cranbrook, Michigan. The fountain was completed in November 1939, but remained veiled until its dedication on May 11, 1940 before a crowd of 3,000 persons.

The fountain, originally named “The Wedding of the Rivers,” depicts the union of the Missouri and the Mississippi Rivers, represented by the two central figures. Accompanying the two main figures and forming a wedding procession are 17 water spirits, symbolic of the smaller streams that empty into the two major rivers.

An uproar arose over the nudity of the male figure, reprenting the Mississippi River and the female figure, the Missouri River. In deference to the criticism, the name of the fountain was changed to ,”The Meeting of the Waters.” (PDF of website on Scribd)

Milles was in his early 60s when we was commissioned by St. Louis.

The former website listed the total cost of Aloe Plaza at $225,000, broken down as follows:

• Fountains: $150,000
• Statues: $60,000
• Lighting: $12,000
• Landscaping: $3,000
• Tulips: $200

The cost of the tulips wasn’t included in the total. Not listed was the cost to acquire the land and raze the buildings.

Milles died on this day in 1955 — 59 years ago.

May 11, 2015 will mark 75 years since Aloe Plaza was first dedicated and ‘Meeting of the Waters’ unveiled. Our IKEA store won’t be open yet, but perhaps the Swedish retailer can be involved in a celebration.

— Steve Patterson