Top 10 Reasons Why America Should Get Rid of the Penny
And Maybe Some Other Coins, Too
Should America get rid of the penny? There are 10 reasons why it should. Those rationales apply to nickels, dimes, and $1 coins. There are three reasons why it shouldn't. Most of those are emotional and based on the penny's long history.
10 Reasons to Get Rid of the Penny
The 10 reasons to get rid of the penny are either practical or financial. They are logical but require a change. Congress must enact a law that eliminates the penny from circulation. It must also direct the U.S. Mint, a bureau of the U.S. Treasury, to stop producing them.
Here are the 10 reasons:
- Pennies don't buy as much as they used to. In 1913, a penny purchased what a quarter does today. Inflation has eaten away at the U.S. standard of living.
- Producing the penny costs taxpayers money and adds to the national debt. In 2017, the penny cost 1.82 cents to make and distribute. The actual production is 1.56 cents, admin costs are 0.24 cents, and distribution to Federal Reserve banks costs 0.02 cents. The U.S. Mint made 8.426 billion pennies, costing taxpayers $68.8 million.
- Pennies are made of zinc and copper. Zinc mining has a negative environmental impact. It leaches into the surrounding soil and streams. It gets into the food stream and could cause health concerns.
- Most of the zinc for penny manufacturing is imported from China. In 2017, it added $2.1 million to the $375 billion U.S. trade deficit with China.
- Pennies are heavy to carry around. Each one only weighs 2.5 grams. But $1 worth weighs 8.8 ounces, about half a pound.
- Americans throw away $62 million in coins each year. Most of it disappears in sofas or is lost on the street. But 11 percent of Americans report they would rather throw a penny away then bother to carry it around.
- Pennies take up time at the cash register to count out. If time is money, then pennies are not worth the time it takes to handle them.
- Most people use credit and debit cards.
- The U.S. military has already eliminated the penny in its overseas bases. It uses disc-like certificates called POGs. Its lowest denomination is the nickel.
- Even charities aren't as keen to promote that "every penny counts." They find the cost of processing all that metal isn't worth the return. The only exceptions are The Salvation Army and UNICEF that rely on canister donations.
Three Reasons to Keep the Penny
Slightly more than half of Americans are emotionally attached to the penny. A 2014 poll by Yougov.com found that 51 percent of Americans want to keep it. Thirty-four percent would be disappointed if the government stopped making pennies. Another 9 percent would be downright angry.
Many Americans are penny-pinchers. When surveyed, 71 percent said they pick up pennies they see on the ground. More than half take their pennies when offered as change. Only 39 percent leave them in the "give a penny, take a penny" dish offered by some retailers.
Another poll found that 77 percent worry about the rounding tax. They assume businesses will round up to the nearest dollar. A 2001 study by Pennsylvania State University estimated that it could cost consumers about $600 million per year. But a Wake Forest University study found there would be no change. The study took sales taxes and other factors into account. The military also found there was no rounding tax. Businesses either rounded up or down to the nearest nickel.
Many have an emotional connection to the penny because of its history. It's been in circulation since 1793. It has borne Abraham Lincoln’s face since 1909.
History of the Penny in the United States
The penny started as pure copper. But copper prices were rising. In 1857, the U.S. Mint added nickel to the copper to cut costs. In 1864, it switched to tin and zinc instead of nickel.
In 1943, pennies were made of zinc-coated steel. Copper had become essential to the war effort during World War II. The Mint accidentally made 40 copper pennies. It happened when copper–alloy blanks remained in the press hopper when production began on the new steel pennies. The record amount paid for a 1943 copper cent was $82,500 in 1996.
In 1962, pennies were no longer made with tin. In 1982, the penny was made of 97.5 percent zinc with only 2.5 percent copper. At 2.500 grams, it weighs more than a dime.
Should Other Coins Be Eliminated?
Many of the reasons for eliminating the penny apply to other coins as well. Inflation has destroyed the value of nickels and dimes as well as pennies. We could easily get rid of pennies, nickels, and dimes and be no more inconvenienced than the average person in 1913. Their lowest coin could buy what the quarter does today. Our pockets would be lighter by not having to make the additional change. Time spent at the register would be less without having to count out dimes, nickels, and pennies.
If cost were the only issue, then nickels should be eliminated as well. They cost 6.6 cents to produce and distribute. Nickels cost the taxpayer $21 million in total. Dimes only cost 3.33 cents, while quarters are just 8.24 cents. They added $483.2 million, which the government uses to pay down the U.S. debt.
If Congress ever eliminates coins, it should consider the $1 coin. In 2005, Congress created a new series of $1 coins commemorating dead U.S, presidents. The United States is the only developed country that still uses $1 bills. But they wear out after a year or so. On the other hand, $1 coins can last 40 years. But Americans prefer to carry $1 bills. In 2011, U.S. Treasury Secretary Tim Geithner suspended their production because no one wanted them. So the Federal Reserve has stockpiled them. By 2013, it accumulated $1.5 billion worth.