In 1965 the U.S. Mint stopped making 90% silver dimes, quarters, and half-dollars and changed them over to base metalcladversions. Some Hope Not," nytimes.com, July 29, 2020. The very fact that pennies have so little value makes them useful to charities because people are happy to give them away. The general rarity of the $2 bill is compounded by the fact that many people hoard them. The Department of Defense banned the use of pennies at overseas military bases in 1980 because the coins were deemed too heavy and not cost effective to ship. 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. ], ProCon.org, "Should the Penny Stay in Circulation? Aaron notes in his Brookings Institution editorial that eliminating both pennies and nickels would round off all cash transactions to the nearest $0.10, making for easier math and less stuff in our pockets.. According to William Safire, in 1950 a penny would buy what a dime would buy today. [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 problem is, too many believe the present administration and government in D.C. is reasonable, when its actually FUBAR. Some penny supporters believe that we should keep the penny out of respect to our country's history and 16th President, Abraham Lincoln, who was the first person to appear on a U.S . They are good for societies that help with cancer, fundraiser, etc. Faced with a similar sea of red ink, Canada stopped making cents in May 2012. [ 36 ] 6. That makes them a much more cost-effective way to honor Lincoln than a penny that costs $0.018 to mint. Since the penny costs 0.26 more than face value to The pro-penny group backs up its claim by pointing to the work of economist Raymond Lombra. The government accountability office reported in 2017 that roughly two-thirds of pennies dont circulate, meaning they are sitting in storage and losing their value over time. Here are both re. None of these changes caused any significant problems in commerce. The penny was first minted in 1857. The melt value of pennies ranges from more than two cents for thepre-1982 copper pennies, to nearly a full cent for the copper-plated zinc pennies. Cash transactions there are now rounded up or down to the nearest $0.05. As both stores and individuals stop keeping pennies on hand, banks wont need to supply as many. It too had very little purchasing power at the end of its life. Aside from its Lincoln portrait, though, it has undergone a number of major changes in design and composition. His mission is to use his platform as an author to bring awareness and perspective on important issues affecting everyday life. The less a person makes the more the saying "every penny counts" rings true. For one thing, consumers benefit from having the penny. News sources such as NPR began speculating whether the penny would finally be retired or if crypto possibilities might replace it. Although originally made of pure copper, pennies today are composed of 97.5% zinc and 2.5% copper. That will save Canadian taxpayers $11 . While countries such as Australia . If we keep the penny we would get more taxes over time. Why or why not? At the G-8 summit next week, the Brits and the French -- even the French! 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? 7 Reasons to Get Rid of the PennyIt's a Money Loser for the Government. Keeping the Penny. TD Ameritrade. Also the United States loses 1.8 cents for every penny being made. ProCon/Encyclopaedia Britannica, Inc. Management decided that losing a cent or two on most transactions was better than having long lines of customers waiting for change. Steel and aluminum are two alternative metals that have been mentioned. 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. 3. It may or may not come as a surprise that it now costs the U.S. Mint almost two cents to make a penny and almost a . the penny under one cent. People think we should not make pennies because they cost 2 cents to make. Is My Penny Solid Copper or a Copper-Plated Zinc Cent? 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. Discounting the fact that those Wheat Cents might have some slightly higher . 3. [14], Dagmar Serota, who created a nonprofit called Good Cents for Oakland, said, Pennies are easy to ask for and they are easy to give. Most Americans want to keep the penny. The American Council of Science and Health calculates that just transporting pennies to banks not even counting any of the other stages of their production put about 107 million pounds of carbon dioxide (CO2) into the atmosphere between 1982 and 2016. According to the 2020 Annual Report from the U.S. Mint, it now costs about $0.018 or 1.8 cents to make one cent. That doesnt sound like much, but a 2019 Federal Reserve study shows that the average consumer still makes 11 cash transactions each month and according to the Bureau of Labor Statistics, there are over 343 million consumers in the country. Eliminating the penny would mean taking away a significant part of his legacy, which many people consider unacceptable. 10 Rarest and Most Valuable Coins in the World, Early Jefferson Nickel Values 1938 - 1964. A 2015 Harris poll shows that 51% of Americans favor keeping the penny, while just 29% think we should eliminate it. Accessed Oct. 21, 2020. The Lincoln cent, now more than 100 years old, is by far the longest-running coin in U.S. history. It's clear that the modern penny is no longer necessary in our financial system. In fact, it costs almost a dime to make a nickel today. In fact, during that year the Mint accidentally made 40 copper pennies! [27], Rounding transactions to the nearest nickel instead of using pennies wouldnt harm consumers or stores. 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. 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. Anti-penny advocates scoff at this argument, pointing out that Lincoln would still remain on the $5 bill, which is actually useful to consumers. One-cent pieces account for nearly three-fourths of the coins now being made by the federal government and critics maintain that the Mints facilities and workforce could be used to better advantage, and much more profitably, by devoting them instead to higher-value coins that yield substantial profits. [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. A study by Walgreens and the National Association of Convenience Stores found that pennies add 2 to 2.5 seconds to each cash transaction. In response, some penny charities started holding nickel drives instead of penny ones, putting their faith in wishing fountains that accept useless coins. NBC's Morgan Radford reports for Weeke. Some stores are even refusing to accept cash altogether. 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. For obvious reasons, pressure to keep the cent has been applied persistently by providers of zinc and copper, the two component metals in the coin, who would lose contracts worth tens of millions of dollars every year if pennies were abolished. 29, 2017, Andrew Stelzer, "Phasing out Pennies in a Bid for Change," npr.org, Nov. 29, 2009, Shaun O'Brien, "Consumer Preferences and the Use of Cash: Evidence from the Diary of Consumer Payments Choice Working Paper," frbsf.org, June 2014, Raymond E. Lombra, "Eliminating the Penny from the U.S. Coinage System: An Economic Analysis," Eastern Economic Journal, Fall 2001, Vancouver School of Economics, "Penny Rounding Profitable for Canadian Grocers: UBC VSE Student Research," economics.ubc.ca, Nov. 16, 2017, Reuters, "Pennies: The Throwaway Coins We Can't Let Go Of," latimes.com, May 31, 1994, Amy Livingston, "Should We Get Rid of the Penny? The penny is no longer a useful form of currency and its continued existence is costing the US government money. Several Chipotle restaurants tried this in 2012, but customers who had extra cents added to their bills complained. 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. That adds up to a loss of over $61 million for that year alone. Despite what the old song says, pennies don't really come from heaven. It remains to be seen how permanent the new reverse will be, with the fiscal sword of Damocles hanging ominously over the pennys future. If you pay with credit or debit card, it is $7.12. Get tips on managing costs, finding financial assistance & more! A graduate of NYU, he has an MA in English literature and loves literature from all ages. 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. Pennies don't last forever, and the US Mint explains that the copper surface can corrode away after a few years. The coin shortage could be a rallying cry for a long-running movement that has lost steam in recent years: Kill the penny! Shops wouldn't get money from you and you can save up. [22], At a total per unit cost of 1.82 cents, it costs nearly two pennies to make one penny. Abraham Lincolns face replaced an image of Lady Liberty on the penny in 1909, the 100th anniversary of his birth, making him the first real person featured on a regular-issue American coin. As you can see, both sides have some good points. A HuffPost/YouGov poll conducted in January found that only 34 percent of Americans are in favor of eliminating the penny, while 51 . Proponents of the penny argue that shopkeepers would tend to round up, increasing prices. However, it doesnt say what those reasons are. Most recently, in 2017, Senators John McCain (R-AZ) and Mike Enzi (R-WY) sponsored ultimately failed legislation that would have suspended minting of the penny. To anti-penny advocates, thats a lot of costs for a coin that cant even buy a piece of gum anymore. For people making over $100,000 those few extra cents don't matter. All of this numismatic change took place without any significant problems. Eventually, this reduced demand will result in fewer pennies being minted each year. Last modified on July 2, 2018. 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. However, the penny is a very sentimental coin to most Americans, and many people fear that eliminating the penny would raise prices because things would need to be rounded up to thenearest nickel. Here are the proper bibliographic citations for this page according to four style manuals (in alphabetical order): [Editor's Note: The APA citation style requires double spacing within entries. [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. 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. Her areas of writing expertise include economic theory and applications, Russian culture and scuba diving. Yes, abolishing the penny is worth considering. Summary: Pennies are made of zinc and copper, and zinc can be harmful: Zinc mining and industrial use has negative . The cost of making pennies in 2019 was 1.99 cents per coin. The penny-pinching . Reason one as to why the penny should be eliminated because in today 's world nothing can be purchased with a penny. Whatever the rationale, 58 percent of men and 73 percent of women wanted to keep the penny in 2006, according to a Coinstar poll. 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. Get Rid of Stupid Pennies," acsh.org, June 17, 2016, Mike's Bikes, "Pennies Don't Make 'Cents,'" mikesbikes.com (accessed July 2, 2018), Retire the Penny, "It Makes 'Cents,'" retirethepenny.org (accessed July 2, 2018), Sebastian Mallaby, "The Penny Stops Here," washingtonpost.com, Sep. 25, 2006, Greg Mankiw, "How to Make $1 Billion," gregmankiw.blogspot.com, Sep. 25, 2006, Consumer Affairs, "The Penny's End Is Near," consumeraffairs.com, July 2006, Courtney Waite, "The Origination of the Lincoln Penny," livinglincoln.web.unc.edu, Apr. I was recently given over 10000 wheat back Lincoln Cents for a YN program we run through the Pennsylvania Association of Numismatists. If that is the case, then people would be less willing to part with spare change for charitable drives. However, 59% of adults polled between June 10 and June 16 of 2004 by Harris Interactive said that they . Rather than drop the practice completely, however, the stores decided to simply round all bills down to the nearest $0.05 instead. Chicago, Illinois 60654 USA, Natalie Leppard The penny debate gained renewed attention when the coronavirus pandemic led to a nationwide coin shortage as consumers moved towards contactless payment methods. Economist Henry Aaron of the Brookings Institution, a nonprofit research group, reminisces in a 2013 anti-penny screed about paying a nickel for an ice cream cone as a boy. Some supporters of the penny point out that its the only coin bearing the image of Abraham Lincoln, probably our nations most revered president. Source: Jeffrey Sparshott, The Penny Cost More to Make Than Its Worth, Again, Dec. 27, 2016, The US Mint shipped 8.4 billion pennies for circulation in 2017, more than all nickels (1.3 billion), dimes (2.4 billion), and quarters (1.9 billion) combined. But one point that these advocates often overlook is the value of honoring Abraham Lincoln, the revered president depicted on the penny's face. In this blog post, we explore the potential of cryptocurrencies to replace the penny. Feb 7, 2014, 08:12 AM EST | Updated Dec 6, 2017. 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. Hardly anyone uses them anymore. If the penny is discontinued, then merchants must round all prices. Some are opposed to change, and others are attached to the penny for sentimental reasons. However, it could be biased because of the differences between segments of the population that pay electronically and with cash. 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. November 29, 2022; did jesus walk on water before or after his resurrection . He believes that knowledge is key to understanding and progress, which he strives to bring to his readers through his work. This cost includes the metal content and the labor used to produce them. 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. "Open an IRA in 15 minutes." The United States should continue the production of the penny. You can easily get rust off a penny using vinegar and salt. All these toxic metals can contaminate water, soil, and plants in the area surrounding the mine. 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. The penny debate gained renewed attention when the coronavirus pandemic led to a nationwide coin shortage as consumers moved towards contactless payment methods. On its website, the group marshals an array of arguments that eliminating the penny would lead to disaster for consumers, charities, the government, and the economy as a whole. It is unclear whether the rounding would be up or down. [12], Organizations such as the Leukemia and Lymphoma Society, the Salvation Army, and the Ronald McDonald House ask people to donate pennies to raise funds. And nickels cost 10 cents to make. Susan Headley is a well-respected coin collecting expert and writer with over 30 years of hands-on numismatic experience. We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. Along with the zinc, the ores usually contain other metals, including toxic metals like cadmium and lead. But others have a vested interest in keeping the penny alive. procon@eb.com, 2023 Encyclopaedia Britannica, Inc. 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. But today, vending machines don't accept pennies, parking meters are coinless and automatic toll booths won't take them either. However, overall, the Mint is a profit-making machine. Since 1982, 327 billion pennies have been minted. For example, the mint made the first dime in 1796 that weighed 2.7 g and had 89.24% silver. Faced with a similar sea of red ink, Canada stopped making cents in May 2012. 1. Freshly minted pennies at the US Mint in Denver All rights reserved. "Penny Stock Rules." Those who support getting rid of the penny argue that it is useless, inconvenient and takes up space that could be given to other denominations of currency. She is a member of the American Numismatic Association (ANA) and holds several certifications. 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. This is the least substantive argument in favor of keeping the penny, and yet, ironically, its probably the most effective. Although these arguments aren't based on factual evidence, there is something to be said for keeping the penny around. The United States has eliminated small denomination coins in the past with relatively little trouble. 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. order out of chaos latin dollar bill,