Why America Should Get Rid of the Penny
Why America Should Get Rid of the Penny
And Maybe Some Other Coins, Too
By Kimberly Amadeo Updated on August 29, 2024
Leave a penny, take a penny. The ubiquitous one-cent coin has lots of fans and lots of detractors. For years it has cost more money to make a penny than the value stored in them, which gets smaller and smaller every year. (This is true for lots of U.S. coins.) Still, we just can't quit the penny, even if most of them seem to spend their days in jars and couches, rather than in our pockets where we might reach for them to pay for goods and services.
Consider these reasons why it's time we put away our pennies for good.
Key Takeaways
A penny is only worth about half of what it costs to produce.
The U.S. Mint is profitable as an organization, contributing hundreds of millions of dollars to the Treasury every year. But the penny is a money loser for the Mint.
Picking up that found penny is not worth your time; the effort required returns less than what you'd earn making the minimum wage ($7.25 an hour).
9 Reasons to Get Rid of the Penny
Pennies don't buy as much as they used to: In 1913, a penny purchased more than a quarter does today (about 32 cents).1
Producing the penny costs taxpayers money: In 2023, each penny produced cost 3.07 cents to make and distribute.2 In 2023, the Mint made 4.1 billion pennies, costing taxpayers $127 million.2
Pennies are made of zinc and copper, and zinc can be harmful: Zinc's mining and industrial use has negative environmental and health impacts. During mining, smelting, and other industrial processes, zinc can leach into the soil, water, and air, and cause health concerns for those living nearby.
Some of the zinc for penny manufacturing is imported: In 2020, zinc imports added $1.3 million to the $310 billion U.S. trade deficit with China.3
Pennies are heavy to carry around: Each one only weighs 2.5 grams, but they add up.4 A dollar's worth of pennies would weigh 250 grams, or about half a pound. Consider that a $1 bill itself weighs just 1 gram.5
Making pennies is a money loser: While the U.S. Mint is a net contributor to the U.S. Treasury, producing pennies is a money loser for the Mint. In 2023, the nation lost $86 million making pennies.2
Pennies take up time at the cash register to count out: If time is money (see below), then pennies are not worth the time it takes to handle them.
The use of cash in retail transactions continues to decline: In 2023, cash was used for just 16% of in-person transactions. That's down from 26% in 2019. Credit cards top the list as the most used payment instrument, accounting for 32% of payments.6
Found pennies aren't worth the effort required to pick them up: The federal minimum wage is currently $7.25 an hour. At that wage, it takes five seconds of work to earn a single cent. If you took longer than that to pick up a spare penny found on the ground, your effort would be earning less than minimum wage.
Note
Getting rid of the penny will not be easy. To do so, Congress must enact a law that removes the penny from circulation. It must also direct the U.S. Mint, a bureau of the U.S. Treasury, to stop producing them.
Why We May Keep the Penny, Anyway
To Continue Reading More: https://www.thebalancemoney.com/get-rid-of-the-penny-4178219