Some are opposed to change, and others are attached to the penny for sentimental reasons. Charities such as the Leukemia and Lymphoma Society and Ronald McDonald House raise funds through penny drives, encouraging people to donate their unwanted pennies for important causes. [15], Common Cents, a nonprofit based in Dallas, TX, has run a Pennies from the Heart program for 20 years, and the student-led efforts have raised over $850,000 for local charities. Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" Nickels also cost more to make than their face value about $0.07 apiece so the Mint loses even more money on each nickel it produces than it does on each penny. They dropped the penny and rounding happens just the way you learned in like 2nd grade. Perhaps the main issue is that some of the major opponents to getting rid of the penny are the producers of coin blanks and the U.S. zinc lobby -- the groups that profit from the production of the penny. According to an old superstition, its good luck to find a penny on the sidewalk. Since 1982, 327 billion pennies have been minted. Most Americans probably dont even realize that for more than 30 years, their pennies have been 97.5 percent zinc, with a thin copper plating to give them the illusion of being red cents with high copper content. Americans have a love-hate relationship with pennies. More recently, a 2017 paper by economist Robert Shapiro estimated that each penny only gets used around twice per year, or 55 times over its lifespan. The US Mint produces coins as instructed byCongress, so a law would have to be passed by Congress and signed by the President in order for pennies to be removed from circulation. 22, 2006, Philip N. Diehl, "The Real Diehl: Its Time for the United States to Eliminate the One Cent Coin," coinweek.com, Jan. 28, 2015, Last Week Tonight, "Pennies: Last Week Tonight with John Oliver (HBO)," YouTube.com, Nov. 22, 2015, J. William Gadsby, "Future of the Penny: Options for Congressional Consideration," gao.gov, July 16, 1996, Aaron Klein, "Time for Change: Modernizing to the Dollar Coin Saves Taxpayers Billions," dollarcoinalliance.org, July 22, 2013, Michelle Z. Donahue, "How Much Does it Really Cost (the Planet) to Make a Penny?," smithsonianmag.com, May 18, 2016, Josh Bloom, "Want to Help the Environment? The arguments for halting production of pennies basically boil down to the idea that theyre more trouble than theyre worth. Pennies today are worth almost nothing, but they still cost money to produce and consume vast quantities of natural resources. The penny was first minted in 1857. A zinc penny weighs 2.5 g. Doing the math, 327 billion pennies weigh 1.8 billion pounds Crypto possibilities are coming into play as more and more businesses accept digital currencies as payment. Americans for Common Cents, the pro-penny group funded by the zinc industry, calls the claim absurd. In the first place, the group argues, employees who spend less time counting out change wont necessarily spend it on other, more useful tasks. the pennyare affected by higher metal costs. However, it could be biased because of the differences between segments of the population that pay electronically and with cash. Eliminating the Penny Reflect: Freewrite Now that you've had a chance to read, review, and reflect on "The Penny Debate," record your thoughts and feelings about whether to keep or eliminate the penny. To access extended pro and con arguments, sources, and discussion questions about whether the penny should stay in circulation, go to ProCon.org. Whats less clear is why Americans are so committed to a coin with so little monetary value. It cost 2.4 cents to make the penny. There have been several other minor changes in the coin metal composition. Of course, spending $0.018 to make a coin thats worth only $0.01 isnt necessarily a bad idea because coins are reusable. Reduced coin usage linked to the pandemic has already had an impact. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Most recently, in 2017, SenatorsJohn McCain(R-AZ) andMike Enzi(R-WY) sponsored ultimately failed legislation that would have suspended minting of the penny. Beyond the excess millions the U.S. Mint spends to crank them out, pennies also take up the lions share of the Mints production capacity. To be fair, the current production cost is down from the 1.66 cents it cost in 2014, and the continuation of a years-long trend and efforts by the Mint to increase efficiency as well as . It also says there are many reasons to believe that time spent at the register could actually increase, rather than decrease, if pennies are eliminated. It's a Money Loser for Retailers. While countries such as Australia, Canada, and New Zealand have phased out their one-cent pieces, Harris Poll found that 55% of Americans are in favor of keeping the penny and 29% want to abolish it. Producing the penny costs taxpayers money: In 2021, each penny produced cost 2.10 cents to make and distribute. The reason that we should continue the production of pennies is because the citizens of the United States do not deserve more change than is needed. The US Mint shipped 8.4 billionpenniesfor circulation in 2017, more than all nickels (1.3 billion), dimes (2.4 billion), and quarters (1.9 billion) combined. He has written for many top publications, such as The New Yorker, Huffington Post, and The Wall Street Journal. In all, it lost $58 million and the Mint, keep in mind, is a federal agency that traditionally makes money in more ways than one. Its possible that what happens to the penny could end up depending not on the law, but on decisions made by businesses. Accessed April 27, 2023. https://www.procon.org/headlines/should-the-penny-stay-in-circulation-top-3-pros-and-cons/, United States Mint, "United States Mint 2020 Annual Report," usmint.gov, 2021, Brian Milligan, "The Penny Coin: Should We Follow Ireland and Phase It Out?," bbc.com, May 8, 2016, The Harris Poll, "Penny for Your Thoughts? That will save Canadian taxpayers $11 . All of this numismatic change took place without any significant problems. Many people thought that 2009, the 100th anniversary of the Lincoln cent, should have been the last year of penny manufacture. Another piece of evidence against Lombras claims comes from Canada, which stopped minting its penny in 2013. One of the functions of prices is to provide participants in the economy with information about the scarcity, supply and demand for a particular good. 9. Preserving the penny keeps consumer prices down and avoids harming low-income households. Later, in 1944, the Mint switched to making pennies out of zinc-bronze alloy. All information published on this website is provided in good faith and for general use only. The existence of pennies helps raise a lot of money for charities. This cost includes the metal content and the labor used to produce them. No, we can't, for some reason. In 2017, Senators John McCain and Mike Enzi introduced S.759 Currency Optimization, Innovation and National Savings (or C.O.I.N.S.) Instance penny supporters claim that the penny still holds value and should be kept in circulation. [11] In 2009, the Leukemia and Lymphoma Society announced that school children had collected over 15 billion pennies in support of its charitable work thats $150 million dollars for blood cancer research and treatment. The cost of producing them is higher than face value. 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. At the direction of Congress, the Mint has been studying potential new compositions that would make the coin cheaper to produce and save the denomination from the scrap heap. However, he also stresses that even if prices did increase, the difference would be so tiny it couldnt possibly affect the CPI. His mission is to use his platform as an author to bring awareness and perspective on important issues affecting everyday life. 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. At the time it was eliminated, the useless halfpenny could buy as much as 15 pennies can today. See Details. A few people groused about it, but commerce continued unabated. It is unclear whether the rounding would be up or down. Simply mix one tablespoon of salt with two tablespoons of white vinegar, then submerge the penny in the liquid for a few minutes. The Penny Should Abolish The Penny. Although originally made of pure copper, pennies today are composed of 97.5% zinc and 2.5% copper. Dont get rid of it! The rust should come right off! Even automatic toll booths wont take them except in Illinois, the home state of President Abraham Lincoln, whose face adorns the coin. Are culture would be forgotten shops prices . 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. (Source 1) That is 60 million dollars we didn't need to lose, and 60 . (6) The penny has become useless as a means of exchange. In some respects, we can make the same argument for the paper dollar. The penny is an interesting coin to discuss. Consider the con arguments from NPRs Planet Money reporter Greg Rosalsky. [9]. "Current Market." After all, we still need the coin for a number of reasons. With more consumers moving toward contactless payment methods, news sources from Fortune to NPR began asking: Is the penny finally on its way out? Large cents bearing portraits of Miss Liberty were minted for 64 years a long lifespan during the nations first century. The reason why is obvious. Men are nearly twice as likely as women to favor dropping the penny (39% vs. 20%). A penny can be used for decades and is more cost-efficient to produce than a nickel. Supporters of the penny point to all-cash transactions as a reason why it should remain in circulation. Several Chipotle restaurants tried this in 2012, but customers who had extra cents added to their bills complained. Vending Machines Don't Want Them. If we were to get rid of the penny, cash transactions would be rounded to the nearest nickel. Learn how to keep it safe. This means that taxpayers are losing money every time the mint produces a penny. Susan Headley is a well-respected coin collecting expert and writer with over 30 years of hands-on numismatic experience. In theory, a single penny could be used for hundreds or thousands of transactions before it drops out of circulation. Some Hope Not," nytimes.com, July 29, 2020. It doesnt matter. A second reason this should happen is that it is bad for the environment. Currently, the cost to make a penny is around 1.82 cents. That means the cost of some items would go up. For instance, penny supporters claim that eliminating the coin could harm the economy or hamper charities in their fundraising efforts. The bills, according to the Federal Reserve, cost only $0.155 to print, far less than their $5 face value. It was first authorized in 1776 to help fund the Revolution. While we do our best to keep these updated, numbers stated on this site may differ from actual numbers. the penny under one cent. According to CNN, the Mint has researched the possibility of making pennies from cheaper materials, but it could not find a way to bring the cost of producing them below their face value. 1943 pennies were made out of a mixture of steel and copper, due to the war effort during World War II. If your thoughts have not changed, list two to three ways your better understanding of the other side of the issue now helps you better argue your position. This cost includes the metal content and the labor used to produce them. It's a Money Loser for You. Using your figures, that would amount to about 1000 ounces of copper. Dominic is passionate about writing stories that have the power to make a difference in peoples lives. 6.9 Reasons Why America Should Get Rid of the Penny - The Balance. The debate over whether or not to get rid of the penny has been going on for years. Dominic Townsend is a successful article author based in New York City. Many anti-penny advocates think the ideal solution to this problem is to eliminate the nickel as well, making the dime the smallest coin in circulation. Pennies are so hard to spend that many people dont even bother they just store them all in jars, or even throw them away. Often, when we pay with cash at a store, the total amount doesnt end in a multiple of $0.05. 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. The cost of pennies is a minor problem. Vending machines dont accept them, and neither do most parking meters. Despite all this, surveys consistently show that most Americans dont want pennies discontinued. 327 views, 5 likes, 2 loves, 11 comments, 2 shares, Facebook Watch Videos from Mount Carmel Baptist Church: Join us as we send off our beloved brother in Christ Brother Carlton Pinney. If we keep the penny we would get more taxes over time. For example, a pizza shop that sells a slice of pizza for $1.98 might start charging $2.00 instead. -Prices will increase because all purchases will have to be rounded to the . Penny opponents point out several problems with this argument. Robert M. Whaples, Professor of Economics at Wake Forest University, crunched the numbers and found that The convenience stores and the customers basically broke even. [30], 1. One problem with this argument, according to penny proponents, is that if there were no pennies, the Mint would have to produce more nickels. In this blog post, we explore the potential of cryptocurrencies to replace the penny. 5. Shops' reluctance to accept cash payments, coins included, has disempowered people experiencing homelessness, who often don . 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. MAKE JEWELRY. The Canadian government stopped producing pennies in May 2012, and the Royal Canadian Mint ceased the distribution of them as of February 4, 2013. Not if we want to keep ination in check, protect America's A $7.12 bill would be $7.10, so if you have that dime, you still don't have to break a dollar. 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. The change from brass, the previous composition, took place in 1982 as a cost-cutting measure because zinc was much cheaper than copper. Most US coins have an expected circulation life of 20 to 30 years, meaning a single penny could be used thousands or even millions of times. These arguments arent based on logic which, ironically, makes them much harder to counter. According to William Safire, in 1950 a penny would buy what a dime would buy today. Jarden and the zinc industry are fighting to keep the penny. Halting production of the coin is becoming a more and more popular topic among anti-penny advocates. Any action you take based on the information found on cgaa.org is strictly at your discretion. [1] Thats a bargain for how many times it gets used. In 1792, Congress created a national mint authorized to make gold, silver, and copper coins, including the one-cent piece known as the penny. That would cost an estimated $10.9 million more annually than it would cost to keep making pennies. That will save Canadian taxpayers $11 million a year, our northern neighbors government reports. [18] Harvard economist Greg Mankiw stated, The purpose of the monetary system is to facilitate exchange. In conclusion we should get rid of the penny. If only cash transactions are affected, then electronic transactions will continue to deliver more sensitive data. [3], For more on US currency, explore Currency and the US Presidents.. At the G-8 summit next week, the Brits and the French -- even the French! In 1943, the Mint produced cents made of zinc-coated steel in order to conserve copper, a metal vitally needed for military uses during that pivotal year at the height of World War II. "Should the Penny Stay in Circulation? Learn more about why the penny should be abolished. Millions of pennies are produced every day and sent out all over the country. The United States penny has had a fascinating journey since entering circulation. [10][11] So what if it costs 1.8 cents to make? The Lincoln cent, now more than 100 years old, is by far the longest-running coin in U.S. history. According to Trading Economics, the inflation rate in Canada since the changeover has wavered between a high of around 3% and a low of negative 0.5%. We strive to write accurate and genuine reviews and articles, and all views and opinions expressed are solely those of the authors. One of the overlooked reasons why we should keep the penny is that the abolition of the penny would force an increase in the production of the nickel, as more nickels would be necessary to make up for the pennies that are not in circulation. However, it would hit low-income Americans especially hard. All rights reserved. You can also make some hand-stamped bling like this . A graduate of NYU, he has an MA in English literature and loves literature from all ages. Thus, it couldnt affect government expenditures or trigger widespread inflation. 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. [37], 7. A low-denomination coin helps keep prices in check. ProCon/Encyclopaedia Britannica, Inc. [4] Several unsuccessful legislative efforts have sought to bring about the pennys extinction. The penny costs an irrational amount of money compared to what it's worth. 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. [34], 5. But one point that these advocates often overlook is the value of honoring Abraham Lincoln, the revered president depicted on the penny's face. Is My Penny Solid Copper or a Copper-Plated Zinc Cent? Should you need such advice, consult a licensed financial or tax advisor. Both sides in the penny debate make some good points, and the solution is far from being an easy decision. If so, how? The penny helps keep high prices in check. Whatever the rationale, 58 percent of men and 73 percent of women wanted to keep the penny in 2006, according to a Coinstar poll. Most Americans want to keep the penny. Remember, pennies cost 2 more than how much their worth, while nickels cost 5 more than the nickel is worth. All prices would have to be rounded to the nearest nickel. Additionally, cryptocurrency transactions are incredibly fast and secure, making them ideal for day-to-day payments. Accessed Oct. 21, 2020. So instead of penny drives, charities could start holding nickel drives, putting out bottles or wishing fountains to collect the new useless coins. Currently there's no action being taken on the elimination of the penny. Hardly anyone uses them anymore. Would love your thoughts, please comment. Learn how to pay for IVF with these strategies for fertility financing. Ironically, getting rid of it might actually make it more difficult for people to donate money since fewer coins would be available. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. The process of making pennies is costly both financially and environmentally. The composition of the coins consisted of an outer shell made out of 75% copper and 25% nickel bonded to a core of pure copper. Producing pennies also uses a great deal of energy. Although the cost for printing a dollar bill is about five cents, only lasts an average of eighteen months. The melt value of pennies ranges from more than two cents for the pre-1982 copper . Depository Trust and Clearing Corporation. List two to three ways. 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). The penny, a one cent coin, costs 2.41 cents to make, which is nearly 1.5 times what it's worth (source 1). [12], Pennies and nickels both cost more to make than their face values, but on average over the last five years, nickels have been made at a loss of 2.58 cents per coin, compared to .65 cents per penny. For every dollar's worth of coins it shipped out the Mint made 45 . Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. We Have a Precedent for Eliminating Worthless 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. New Zealand got rid of its penny and two-penny coins without incident back in 1989, and in 1991 replaced their two lowest paper denominations with coins. [5], Mark Weller, Executive Director of the pro-penny group Americans for Common Cents, says, The alternative to the penny is rounding to the nickel, and thats something that will negatively impact working families every time they buy a gallon of gas or a gallon of milk. [6], The US Federal Reserve found that minorities and low-income people are more likely to use cash than credit cards. [27], Rounding transactions to the nearest nickel instead of using pennies wouldnt harm consumers or stores. This is why anti-penny advocates argue that its 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. Four decades ago, the Mint made more than 1.5 million prototype aluminum cents during a similar crisis, with every expectation they would soon see use in circulation. The U.S. One Cent coin, or penny, has almost no purchasing power today. However, while many people are calling for the pennys retirement, others are working just as hard to keep the coin in circulation. Thats what happened in Canada, where the Salvation Army and numerous other charities held drives to collect discontinued pennies in 2013. Let's take a look at the issues involved in the pro-penny and the anti-penny debate so that you can make up your mind about where you stand on this critical matter. In all, it lost $58 million - and the Mint, keep in mind, is a federal agency that traditionally makes money in more ways than one. Less than forty years later, the mint reduced the weight to 2.67 g and used a composition of 90% silver. Pennies are worth so little now that by taking five seconds to pick one up, youre earning just $7.20 an hour less than the federal minimum wage. The group's mission is to keep the penny in use. Remember to focus on content rather than grammar or mechanics. He believes that knowledge is key to understanding and progress, which he strives to bring to his readers through his work. We also share information about your use of our site with our social media, advertising and analytics partners. It's clear that the modern penny is no longer necessary in our financial system. In response, some penny charities started holding nickel drives instead of penny ones, putting their faith in wishing fountains that accept useless coins. The analysis also shows that tooth decay is still the most common reason for hospital admission with 30,000 children and young people aged 0-19 admitted to hospital last year. U.S. Securities and Exchange Commission. View full document. It's the $2 bill and it's the rarest small-denomination currency in circulation, representing about 1 percent of our money. The difference between the face value of a coin and and the actual cost to make it is known as seigniorage. 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. Copyright 2023 AMAC, Inc. / AMAC Senior Resources Network. "Microcap Stock: A Guide for Investors." She also maintains a personal blog. 10 reasons why we should keep the penny . Yes, abolishing the penny is worth considering. Removing the penny would save taxpayers money and reduce unnecessary waste. Should the US government consider removing other coins from circulation as transactions become more digital? There are precedents for getting rid of coins that are too small to use. Back in 1857, the U.S. Mint stopped producing half-cent coins which, according to the historical information calculator at MeasuringWorth.com, had a purchasing power of $0.15 in 2020 dollars. Another significant change in U.S. coinage occurred without any catastrophic effects on commerce. The debate over whether to keep the penny or discontinue it has intensified since the penny crossed the line of one-cent production cost per penny. Life Without Pennies. The elimination of a $58 million dollar annual cost on a federal government running trillion dollar annual deficits each and every year isnt going to move the needle one micrometer back towards fiscal sanity in this country.

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