Author Dominic Townsend
Posted Feb 26, 2023
Should we get rid of the penny? This question has been debated for years, with people arguing for and against its elimination. A nonpartisan organization called Citizens for Retiring the Penny, founded by students at Wake Forest University in 2006, supports eliminating it from circulation. Representative Jim Kolbe of Arizona sponsored a bill in February 2014 that President Barack Obama argued was a “common-sense approach” to reducing government waste. In response to this Youtube chat, members of Common Cents, a main pro-penny lobbying group which represents Jarden Zinc Products (a major producer of copper blanks used to mint coins) conducted polls showing that most Americans favor keeping the penny. The group marshals support from consumers, charities and small businesses who argue that without the penny there will be higher prices due to rounding up costs.
The penny debate gained renewed attention when the coronavirus pandemic led to a nationwide coin shortage as consumers moved towards contactless payment methods. News sources such as NPR began speculating whether the penny would finally be retired or if crypto possibilities might replace it. As debate continues on both sides, let's explore 8 reasons why we should keep or eliminate it.
Exploring Other Crypto Possibilities
The ubiquitous one-cent coin has been a part of our everyday lives for over two centuries - and some argue that it's time to get rid of it. Crypto possibilities are coming into play as more and more businesses accept digital currencies as payment. In this blog post, we explore the potential of cryptocurrencies to replace the penny.
Cryptocurrencies provide users with an alternative form of money that is not controlled by any government or bank, but is instead based on blockchain technology. This means users can store and transact with their coins without interference from third parties such as banks or governments. Additionally, cryptocurrency transactions are incredibly fast and secure, making them ideal for day-to-day payments.
The use of cryptocurrency for small payments such as the penny could revolutionize how people manage their finances, allowing them to make quick, secure purchases without worrying about currency conversion rates or transaction fees. Furthermore, since crypto coins are divisible into smaller amounts than fiat currency, it would be easier for people to pay for items in exact amounts rather than rounding up or down to the nearest full denomination.
Halt the Penny: Time to Say Farewell
The penny has been around for centuries, but it may be time to say farewell. Halting production of the coin is becoming a more and more popular topic among anti-penny advocates. Pennies are basically worth pennies today, and they consume vast quantities of natural resources to produce. Not only do they cost money to make, but they don't buy much anymore - you can't even buy gum with them!
It's clear that the modern penny is no longer necessary in our financial system. From an economic standpoint, it simply doesn't make sense to continue producing these coins. With that in mind, halting production of the penny may be a sensible decision for society as a whole.
1. They’re Useless
Baby boomers may nostalgically reminisce of a time when the penny was king, but economist Henry Aaron of the Brookings Institution and other nonprofit research groups argue that the penny's time has come and gone. In 2013, Aaron wrote an anti-penny screed pointing out that it costs more to make a penny than its face value - 1.8 cents each - and therefore it is not cost-effective.
Aaron's argument resonates with many modern consumers who remember when a person could buy a mini Tootsie Roll, Mary Jane or ice cream cone at the candy store with just one penny. But today, vending machines don't accept pennies, parking meters are coinless and automatic toll booths won't take them either. Despite President Abraham Lincoln's face adorning the single penny, most people don't use or even expect pennies as payment anymore. The typical store doesn't even have them available for purchase or give them out in change - they flat-out refuse! Economist Greg Mankiw of Harvard University argues that if people start leaving pennies at cash registers due to their lack of purchasing power (in 2020 dollars, 15 pennies would be worth one monetary unit), then maybe then the useless halfpenny will finally be stamped out too.
2. They Waste Time
The total amount doesn't end when coins and citizens are debating the penny and whether or not it should be kept. Convenience stores across the nation have been showing how handling pennies adds up in cash transactions, but that doesn't sound like a huge issue until you look into the 2019 Federal Reserve study that shows the average consumer makes 11 cash transactions in one week. This is backed up by U.S. Bureau of Labor Statistics; they state there are 343 million consumers in this country adding up to over 25 million hours wasted on counting pennies.
Getting rid of the penny would save time since customers wouldn't have to search for their nearest nickel and wait in long lines while customers ahead of them try to count out exact change. Chipotle restaurants have already taken this initiative by simply rounding bills off to the nearest nickel, but when management decided to do this some customers complained about paying extra cents added on their bills. Although some stores have decided to practice completely without pennies, an argument from Americans is that it's just common cents to keep them around. A pro-penny group funded by the zinc industry calls these claims absurd, as they argue employees would save more time spent counting change than people would necessarily spend if we got rid of them.
3. They’re Bad for the Environment
Pennies don't last forever, and the US Mint explains that the copper surface can corrode away after a few years. According to the American Council on Health and Science, penny accounts for 2.4% of all coins produced annually in the US with metal content including zinc ores that are hazardous to environment when released. In addition, zinc is toxic in high doses and small amounts can contaminate water and soil in the area surrounding ore roll producing pennies. It takes a great deal of energy to produce pennies and according to the Environmental Protection Agency, it releases 107 million pounds of carbon dioxide (CO2) into the atmosphere every year while transporting them.
4. They Cost the Government Money
Anti-penny advocates point to the 2020 annual report from the U.S. Mint, which states that it costs 1.7 cents to produce a single penny. This means that taxpayers are losing money every time the mint produces a penny. The government accountability office reported in 2017 that roughly two-thirds of pennies don’t circulate, meaning they are sitting in storage and losing their value over time. Economist Robert Shapiro estimated in a 2017 paper that it costs 55 times more to make pennies than the value of each coin itself.
The 2020 annual report also states that the mint shipped 8 billion coins last year, most of which were nickels and quarters; dimes still put into circulation cost only 6 cents each to make. This is why anti-penny advocates argue that it’s a bad idea to keep making them when the mint loses money doing so, while other coins like nickels cost less to make but have higher value. Aaron notes in a Brookings Institution editorial that eliminating pennies would help with cash transactions as well, since it would make calculations easier without having to deal with fractions of cents.
The Fascinating Journey of the United States Penny
The United States penny has had a fascinating journey since entering circulation. It began as a pure copper coin, but when prices rose during World War I, the Mint added nickel to the penny to cut costs. Later, in 1944, the Mint switched to making pennies out of zinc-bronze alloy. 1943 pennies were made out of a mixture of steel and copper, due to the war effort during World War II. In fact, during that year the Mint accidentally made 40 copper pennies! These coins have become highly sought-after collectibles and in 2010 one sold for $1.7 million - a record amount paid for a 1943 copper cent!
After 1962, pennies were no longer made of copper or bronze but instead were minted from 97.5% zinc with 2.5% copper coating. This change was likely an attempt to cut costs further as the cost of copper had risen again by this time. The composition change also meant that Pennies became lighter; before 1982 they weighed 3.11 grams compared to only 2.5 grams after 1982 and about 2500 grams for one dime (2268 grams).
Although debate continues today about whether we should get rid of the penny entirely or not, its long history is something worth noting and it’s clear that it has undergone some monumental changes over time – from its composition to its patterns on both sides - which makes it an interesting part of our nation’s history.
Advantages of Keeping the Penny
The debate over whether or not to get rid of the penny has been going on for years. Instance penny supporters claim that the penny still holds value and should be kept in circulation. They argue that eliminating it could hamper charities and fundraising efforts, as people feel more generous when they have coins to give away.
Although these arguments aren't based on factual evidence, there is something to be said for keeping the penny around. Ironically, getting rid of it might actually make it more difficult for people to donate money since fewer coins would be available. This could potentially have a big impact on charitable organizations that rely heavily on donations from their supporters.
1. They Keep Prices Low
Supporters of the penny point to all-cash transactions as a reason why it should remain in circulation. For these types of payments, rounding to the nearest nickel would cost consumers an extra 2021 dollars annually. Proponents of the penny argue that this small change could be felt most strongly by low-income Americans and according to a CNBC survey, nearly half of adults agree. A pro-penny group backed by economist Raymond Lombra testified before the Senate Banking Committee in 2006 that his careful statistical analysis of store prices showed that rounding cash sales to the nearest nickel would cost consumers billions in extra costs.
However, a newer study published in 2007 by economist Robert Whaples in the Eastern Economic Journal contradicts Lombra's findings. Through careful analysis of 200,000 convenience store transactions, Whaples concluded that sales taxes and other fees charged to consumers were slightly ahead of prices rounded to the nearest nickel which meant it couldn't possibly affect consumer spending or trigger widespread inflation - two claims made by Lombra. The United States mint stopped minting pennies for general circulation after 2013 but cash transactions still make up less than 8% of all payments while credit and debit cards, as well as old-fashioned checks are used more often now than ever before according to Trading Economics. The current inflation rate is 3.2%, which is below its historical average, so it's unlikely that getting rid of the penny would cause any widespread increase in prices either.
2. Charities Rely on Them
Charities rely on penny drives as an easy way to raise funds, and pro-penny groups argue that the elimination of the coin would have a negative impact on charitable donations. Every year charities like the Lymphoma Society and Ronald McDonald House raise funds through penny drives, encouraging people to donate their unwanted pennies. But penny opponents point out that even if the Mint stops producing pennies, charities won't simply lose out - they'll gradually be pulled away as stores stop accepting pennies and consumers switch to other coins.
The Salvation Army was one of the first charities to hold drives to collect discontinued pennies when the Canadian government announced it would drop its lowest-value coin, due to its cluttering up peoples' pockets. In response, some penny charities started holding nickel drives instead of penny ones, putting their faith in wishing fountains that accept useless coins. But without its namesake coin, many of these penny points saw a significant drop-off in donations - as much as 90%, according to one group that doesn't provide further details. Finally, small-change drives aren't always enough to raise funds - clean sorting and counting are required before any money can be collected, and many organizations are now accepting donations electronically over coin drives for this reason. The penny's diminishing role means that it may not be here for much longer - so get rid of those spare coins you have tossed around in your pocket!
3. They Honor Lincoln
The penny is an interesting coin to discuss. There are many anti-penny advocates that scoff at its existence, arguing that it costs more to mint pennies than the coins are worth. But one point that these advocates often overlook is the value of honoring Abraham Lincoln, the revered president depicted on the penny's face.
Eliminating the penny would mean taking away a significant part of his legacy, which many people consider unacceptable. This argument pointing to honoring Lincoln has been enough to stave off elimination for years, with few anti-penny advocates willing to make this penny point in their arguments against it. Despite the cost incurred by the Federal Reserve for minting pennies, many Americans still feel it important enough to honor Lincoln's legacy that they keep the coin bearing his image in circulation.
Frequently Asked Questions
Why should the penny be removed?
The penny is no longer a useful form of currency and its continued existence is costing the US government money. Removing the penny would save taxpayers money and reduce unnecessary waste. Read more to learn about the potential benefits of eliminating the penny.
Should We Abolish the Penny?
Yes, abolishing the penny is worth considering. The production and use of the penny is no longer cost-effective, so it may make sense to eliminate it as a way to save money and resources. Learn more about why the penny should be abolished.
How do you get rust off of a penny?
You can easily get rust off a penny using vinegar and salt. Simply mix one tablespoon of salt with two tablespoons of white vinegar, then submerge the penny in the liquid for a few minutes. The rust should come right off! Want to learn more? Read our guide on how to clean pennies.
Will dropping the Penny cost the government more?
No, dropping the Penny won't cost the government more. It may even save money in production costs, as fewer pennies would need to be minted. To learn more, read our article on the possible economic impact of eliminating the penny.
Should the Penny stay in circulation?
Yes, the penny should stay in circulation as it is a reminder of our country's history and serves to keep the cost of goods low. However, new initiatives are being proposed to make the penny more efficient - read more to find out how!