This makes sense. Its possible that what happens to the penny could end up depending not on the law, but on decisions made by businesses. There are precedents for getting rid of coins that are too small to use. If so, how? The cent has served the nation well since then, and many Americans view it with affection a sentiment that has grown even stronger since the coin began featuring the likeness of Abraham Lincoln in 1909. Those who oppose keeping the penny say it's not likely that we will identify new ways to bring down the cost of manufacturing pennies. Companies would need to update their price catalogs. It too had very little purchasing power at the end of its life. One-cent pieces account for nearly three-fourths of the coins now Large cents bearing portraits of Miss Liberty were minted for 64 years a long lifespan during the nations first century. 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. Will a suitable substitute be found? Producing the penny costs taxpayers money: In 2021, each penny produced cost 2.10 cents to make and distribute. The cost of pennies is a minor problem. Proper citation depends on your preferred or required style manual. 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. When the Baby Boomers were young, a penny still had some value. Steel and aluminum are two alternative metals that have been mentioned. Post date: 20 yesterday. 8 Reasons to Keep It vs Eliminate It," moneycrashers.com (accessed July 2, 2018), Rodney J. Bosco and Kevin M. Davis, "Impact of Eliminating the Penny on the United States Mint's Costs and Profit in Fiscal Year 2011," pennies.org, Apr. Halting production of the coin is becoming a more and more popular topic among anti-penny advocates. In 2010, it cost 1.67 cents to produce each penny. To save time at the register, some businesses have experimented with rounding all transactions to the nearest nickel. 2023 Money Crashers, LLC. The change from brass, the previous composition, took place in 1982 as a cost-cutting measure because zinc was much cheaper than copper. In recent years, a debate on whether or not America should keep the penny has arisen. Shops wouldn't get money from you and you can save up. Feb 7, 2014, 08:12 AM EST | Updated Dec 6, 2017. Consider the con arguments from NPRs Planet Money reporter Greg Rosalsky. -Prices will increase because all purchases will have to be rounded to the . The United States has eliminated small denomination coins in the past with relatively little trouble. His mission is to use his platform as an author to bring awareness and perspective on important issues affecting everyday life. Supporters of the penny point to all-cash transactions as a reason why it should remain in circulation. If more businesses follow Chipotles example and start rounding down their bills, their customers will find themselves with fewer pennies in their pockets. Eliminating pennies would save time at the point of purchase without hurting customers or businesses financially. In 2009, four different cents were issued with images representing key segments of Lincolns life. Remember to focus on content rather than grammar or mechanics. 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. For every dollar's worth of coins it shipped out the Mint made 45 . The debate over whether or not to get rid of the penny has been going on for years. However, once stores stop accepting pennies, consumers will have even more incentive to donate the coins to charity because they wont be able to use them anywhere else. Some are opposed to change, and others are attached to the penny for sentimental reasons. Should we keep the penny. While the one-cent, once-copper coin doesn't have the purchasing power it used to, Americans still have a hard time letting it go. In 2020, the penny debate gained new attention as the coronavirus pandemic led to a nationwide coin shortage. As the U.S. Mint faces the prospect of having to find more cost-effective compositions from which to make the nation's coinage, the debate about the continued existence of the humble penny is sure to carry on. 10 reasons why we should keep the penny. However, other arguments are sentimental, having to do with the way people feel about the coin. Proponents of the penny argue that shopkeepers would tend to round up, increasing prices. Accessed Oct. 21, 2020. People think we should not make pennies because they cost 2 cents to make. Its giving store owners even more reasons to avoid handling cash as much as possible. Depository Trust and Clearing Corporation. Even during my childhood in the 1980s, there was a candy store not far from our house that sold penny candy in jars one penny for a mini Tootsie Roll, or two for a Mary Jane. Make sure you have some later too. Learn how to pay for IVF with these strategies for fertility financing. The elimination of the penny would cause prices to be rounded up to the nearest nickel, which would be a burden on consumers, businesses, and the economy. If 77.1% of you voted to keep the penny in our 1st poll I bet we can . Management decided that losing a cent or two on most transactions was better than having long lines of customers waiting for change. Many foreign nations have eliminated their most minor denominations with almost no impact on commerce or consumer confidence in the monetary system. Pennies are still good but, many people think not. 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. All rights reserved. Payments made with credit, debit, or old-fashioned checks are still settled down to the cent. While every effort has been made to follow citation style rules, there may be some discrepancies. In his spare time, Dominic enjoys running along the Hudson River and exploring the citys art galleries.He is also heavily involved in numerous charities and volunteer efforts throughout the city. 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 penny has increased to 7.6 million dollars a year to make a penny. Whatever the reason, I think it's clear that no matter how you add it up, it just makes more sense to get rid of the penny. To begin with, the Mint itself cant impose such a death penalty. [29] An estimate from Citizens to Retire the penny says that the 107 billion cash transactions in the United States annually add up to 120 million hours of time between customers and employees at a cost of $2 billion to the US economy. It takes a lot of time for volunteers to pick up, clean, sort, and count all those coins, and the more pennies there are in the mix, the less value the charity gets for each coin it handles. Theyre so hard to use that they end up stuffed in jars or abandoned on sidewalks. Men are nearly twice as likely as women to favor dropping the penny (39% vs. 20%). The main pro-penny lobbying group is Americans for Common Cents, which represents Jarden Zinc, the company that makes the zinc and copper blanks from which pennies are produced. In 2017 it earned almost $400 million in profits producing circulating coins. 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. In 1856, the weight was further reduced to 2.49 g. In 1873, the weight was increased to 2.50 g where it remained until silver was eliminated from all coins in 1965. She holds a Bachelor of Arts in economics and international studies from Yale University. 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. Some supporters of the penny point out that its the only coin bearing the image of Abraham Lincoln, probably our nations most revered president. The problem is, too many believe the present administration and government in D.C. is reasonable, when its actually FUBAR. And its very easy for a child to say, Will you help me support this nonprofit, will you give me your pennies? [6] Elementary school students in Los Angeles, CA, gain significant leadership and civic engagement experience from USCs Penny Harvest program by choosing how to donate the money they raise. Some of the arguments for keeping the penny are practical ones. The U.S. One Cent coin, or penny, has almost no purchasing power today. [18] Harvard economist Greg Mankiw stated, The purpose of the monetary system is to facilitate exchange. [28] Harvard economist Greg Mankiw says that this wasted time costs the US economy around $1 billion annually. Dont get rid of it! 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. Although originally made of pure copper, pennies today are composed of 97.5% zinc and 2.5% copper. In 2010, it cost 1.67 cents to produce each penny. Want to learn more? The penny-pinching . There are notable points that both sides make. Maybe this is another consideration that the U.S. government should look at. 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. She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. 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. Another piece of evidence against Lombras claims comes from Canada, which stopped minting its penny in 2013. March 10, 2016 Should we keep the penny or not? Cash transactions there are now rounded up or down to the nearest $0.05. 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 . [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. 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? 4. https://www.britannica.com/story/pro-and-con-penny. One of the biggest reasons that you should donate is to remove poverty from the world. Learn more about why the penny should be abolished. In some respects, we can make the same argument for the paper dollar. 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. 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 price of zinc, which currently composes 97.5 percent of a penny, has tripled over the past 15 years. Numerous Americans are in favor of keeping it due to sentimental value, while others say it is just too costly. One problem with this argument, according to penny proponents, is that if there were no pennies, the Mint would have to produce more nickels. 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. 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. "FAQs: How Issuers Work with DTC." 6.9 Reasons Why America Should Get Rid of the Penny - The Balance. Should we keep the penny. It's a Money Loser for You. [31][32][33], 2. A nonpartisan organization called Citizens to Retire the U.S. Penny has attracted the support of economists from Harvard and Wake Forest University. 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 current cost for manufacturing a nickel is 7.29 cents per coin. With that in mind, halting production of the penny may be a sensible decision for society as a whole. Now put it to work for your future. The penny has been around for centuries, but it may be time to say farewell. 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? Franklin is also credited with the saying, A penny saved is a penny earned. [35], 3. 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. Finally, small-change drives arent a cost-effective way for charities to raise funds. Most Americans want to keep the penny. She also maintains a personal blog. But since then, the cost of zinc has risen dramatically and thats a big reason the cost of making cents is now over the top. Economist Greg Mankiw of Harvard University argues that pennies are simply no longer useful as a means of exchange: When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful.. Producing the penny costs taxpayers money: In 2021, each penny produced cost 2.10 cents to make and distribute. Several unsuccessful legislative efforts have sought to bring about the pennys extinction. I think it human nature to maintain status quo until it becomes a crisis. The United States should get rid of the penny because it is people are not using them, cost to much, and other countries have already dropped the penny. Reduced coin usage linked to the pandemic has already had an impact. 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. Jarden and the zinc industry are fighting to keep the penny. Although these arguments aren't based on factual evidence, there is something to be said for keeping the penny around. But the price of copper receded, and plans for the change were dropped. The less a person makes the more the saying "every penny counts" rings true. As the U.S. Mint explains, the copper surface of a penny accounts for only 2.5% of its metal content. If we keep the penny we would get more taxes over time. He believes that knowledge is key to understanding and progress, which he strives to bring to his readers through his work. Will todays cent get the same kind of reprieve? "Current Market." Nickels cost 7.7 cents to make, (2.7 cents over face value, as opposed to 0.26 cents over face value to make a penny,) so making each nickel costs 1.44 cents more than making each penny. According to Americans for Common Cents, this will lead to a rounding tax. In other words, stores will deliberately manipulate their prices to ensure transactions are always rounded up instead of down. ", ProCon.org. And nickels cost 10 cents to make. They are also bf and environment this doesnt make your hands very very very stinky I dont like the smell of metal. The existence of pennies helps raise a lot of money for charities. 12, 2012, United States Mint, "United States Mint 2015 Annual Report," usmint.gov, June 2016, Associated Press, "US Penny Campaign Benefits Blood Cancer Research," newsday.com, Feb. 10, 2009, University of Southern California, "The USC Penny Harvest Wrapped up Its Third Successful Year," communities.usc.edu (accessed July 2, 2018), Common Cents, "Non-Profits," commoncentsdallas.org (accessed July 2, 2018), Mary Hance, "Penny Drive Sets Record in Raising Money for Second Harvest," tennessean.com, Feb. 17, 2017, Vlogbrothers, "I HATE PENNIES!!!! Hey we should because it would be very hard to get a sense even through really more people took it away you want to get one sent back you just keep the money back horrible, get rid of the penny its a worthless coin and costs more than its worth to make, Not really he has a point that it does cost more to make. ], ProCon.org, "Should the Penny Stay in Circulation? Learn all you need to know about United Airlines seat selection - tips and tricks to get the best deal and a comfortable flight every time. 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. After reading the pros and cons on this topic, has your thinking changed? 1943 pennies were made out of a mixture of steel and copper, due to the war effort during World War II. This is the least substantive argument in favor of keeping the penny, and yet, ironically, its probably the most effective. Its the only coin we have that has Lincolns face on it! The U.S. Mint does lose money on pennies and nickels. The reason why is obvious. 7 Reasons to Get Rid of the PennyIt's a Money Loser for the Government. The mint produces billions of these coins every year. Susan Headley is a well-respected coin collecting expert and writer with over 30 years of hands-on numismatic experience. [1] Aaron Klein, former Deputy Assistant Secretary for Economic Policy at the Treasury Department, estimates that the United States could see $1.78 billion in losses over the next 30 years if the penny remains in production. The alternative to the penny . After 1962, pennies were no longer made of copper or bronze but instead were minted from 97.5% zinc with 2.5% copper coating. We Won't Forget President Lincoln. 9 "Centsible" Reasons to Get Rid of the Penny . Most recently, in 2017, SenatorsJohn McCain(R-AZ) andMike Enzi(R-WY) sponsored ultimately failed legislation that would have suspended minting of the penny. Why or why not? According to an old superstition, its good luck to find a penny on the sidewalk. 10 Rarest and Most Valuable Coins in the World, Early Jefferson Nickel Values 1938 - 1964. -- who dumped their low-denomination coins 30 years ago, will be laughing at our senseless jingling. Dominic is passionate about writing stories that have the power to make a difference in peoples lives.He believes that knowledge is key to understanding and progress, which he strives to bring to his readers through his work. Accessed Oct. 21, 2020. 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. Despite all this, surveys consistently show that most Americans dont want pennies discontinued. 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. It's the $2 bill and it's the rarest small-denomination currency in circulation, representing about 1 percent of our money. A study by Walgreens and the National Association of Convenience Stores found that pennies add 2 to 2.5 seconds to each cash transaction. 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. 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. Learn how to protect yourself when the bank takes your car. Today, theres literally nothing you can buy with a single penny and you cant do much else with it either. However, a newer study by economist Robert Whaples, published by the Eastern Economic Journal in 2007, contradicts Lombras findings. Or will the Law of Supply and Demand keep putting upward pressure on metal prices and make it impractical to keep producing cents of any kind? -Pennies are less costly to make than nickels, as 5 pennies, costing 6.3 cents to make at 1.26 cents per penny are less cheaper than nickels, which are cost 7.7 cents to make. Preserving the penny keeps consumer prices down and avoids harming low-income households. 4. In the rare case you have never heard of or used a penny, it is the one cent coin in U.S.
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