Content of the material
- Money Classic
- 50 years of Money. Celebrate with Money Classic throughout the year.
- 2. It’s a Money Loser for You
- Which pennies are worth money?
- How Will Stores Handle Transactions Without Pennies?
- History of the Penny in the United States
- 6. We Have a Precedent for Eliminating Worthless Coins
- Take Action
- Pro-Penny Arguments
50 years of Money. Celebrate with Money Classic throughout the year
2. It’s a Money Loser for You
The penny can buy nothing of value today. Its purchasing power is so low, it’s provided free for the taking in many stores. And, as economist Greg Mankiw has observed, “When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful.”
Today, the average hourly wage in the U.S. is over $22 an hour. Which means the average worker earns 6/100ths of a cent every second. If you take three seconds to stop and pick up a penny, you’re losing money, not gaining it.
The reasons the government has to produce so many new pennies each year is because Americans simply discard them, or use them to fill jars.
Which pennies are worth money?
All pennies are worth money, but some have become collectible. Collectors may seek out coins that were minted under unusual circumstances or with outdated designs, thus adding value to some pennies.
How Will Stores Handle Transactions Without Pennies?
We are moving toward a cashless society and most transactions are handled electronically with credit cards, ATM cards, peer to peer purchasing systems such as Venmo or Zelle, or even with an old-fashioned check. The emergence of Bitcoin, Etherium, and other cryptocurrencies has also been cited as a growing reason for the decline of the penny. So eliminating the penny won’t actually affect most people.
For people who insist on paying cash, the US Mint recommends that stores round up or down to the nearest nickel.
Note: As a side effect, expect state and local sales taxes to increase to round up to the nearest nickel as well to make accounting easier for stores and cashiers.
History of the Penny in the United States
The penny first entered circulation in 1793 as a pure copper coin. In 1857, the U.S. Mint added nickel to the copper to cut cost, as the cost of copper was rising. In 1864, the Mint switched to tin and zinc (bronze) 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, which have become highly sought-after collectibles. The record amount paid for a 1943 copper cent was $204,000 in 2019.
In 1962, pennies were no longer made with tin. Since 1982, the penny has been made with 97.5% zinc and just 2.5% copper. At 2.500 grams, it weighs more than a dime (2.268 grams).
6. We Have a Precedent for Eliminating Worthless Coins
America began minting half pennies in 1793. By 1821, when the Post began publishing, the coin had the purchasing power of today’s dime. But by 1857, the half penny had lost so much value, the mint ceased its production.
Take ActionPresident Trump, Secretary Steve Mnuchin, and Members of Congress must hear from you!
The more than $85 million in annual loses to oenny productioncould, and should be, allocated to other important and under-funded issues, like transportation infrastructure, education, and healthcare. Join the fight and stand with Retire the Penny by signing up below. This form will automatically tell those in the Trump adminstration how important this issue is to you!
Also, you may click here to find your local elected government officials and voice your concern.
Those who think we should keep the U.S. penny cite the following arguments to support their position.
- Prices will increase. If the U.S eliminates the penny, merchants will round the amount up to the nearest five cents. They will probably round everything up in their favor, costing us more for everything we buy.
- The poor pay the most. A corollary to the above argument says that the poor will be affected the most because the poor are most likely to make more frequent, smaller purchases, thus suffering the rounding up more often.
- Charities need pennies. Many small charities depend on penny drives to bring in donations. People think nothing of pouring out their old penny jars to support these drives, but they won’t part with nickels so easily.
- Nickels cost even more to make. If we eliminate the penny, we will need more nickel coins in circulation. Nickels cost 7.29 cents to make, (2.29 cents over face value, as opposed to 0.99 cents over face value to make a penny,) so making each nickel costs 1.3 cents more than making each penny. Since the penny costs almost 2.5 more than face value to make, the Mint can make 5 pennies and still lose less money than making one nickel. And, of course, if we eliminate the penny, we’ll need a lot more five-cent coins, which will offset the savings of stopping penny manufacture.
- Pennies are sentimental. The fact is that Americans love their pennies and hate to change things. We’ve always had pennies and therefore still should have pennies, according to this thinking. This type of thinking uses the same logic that rejects eliminating the paper dollar in favor of a much more cost-effective coin. Additionally, the same reasoning rejected the adaptation of the metric system in the United States even though virtually the entire rest of the world uses it. Americans are traditionalists, and the Lincoln Cent is the epitome of modern-day circulating coin tradition.
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