These days there’s so much gridlock and partisan fighting in Washington that it seems impossible to enact even the most apolitical, common-sense changes. And before you project your own beliefs onto me, let me be clear, I’m talking about the penny.
In 2018, it cost the U.S. Mint 2.06 cents to manufacture each penny, more than double its face values. The nickel costs 7.53 cents to make, and together they cost Americans $119 million last year.
Now, relative to the $4.4 trillion federal budget this may seem like, well, pennies, but that hardly justifies throwing the money away. After all, a penny saved is a penny earned.
Try to think back to the last time you used a penny. Most Americans make most of their transactions with a credit or debit card, and with online shopping and services like Venmo and Apple Pay, the share of transactions made with cash is likely to continue to decline.
Even when you do pay in cash, you reach for the quarters and dimes before you carefully count out each individual cent. Pennies are already not accepted at most vending machines and toll booths.
Bills to retire the penny have been introduced in Congress in the past, but they never went anywhere. If one did pass, merchants would have to round their prices to the nearest nickel (or nearest dime it you got rid of nickels too) at least for cash transactions. The U.S. Mint would stop producing new pennies, and the currency would gradually be phased out of use.
It’s far from an unprecedented move, Australia discontinued one-cent coins in 1990 after the cost of metal exceeded face value, and in 2012 Canada did the same. Mexico and New Zealand have made similar moves, and none of them experienced any detriment to their economy.
It wouldn’t even be unprecedented in the United States. We discontinued a half-cent coin in 1857, when it was worth more than a dime today. If we applied the same standards to the one-cent coin, it would have been discontinued in the early 1950s.
If you’re worried about a loss of jobs for the workers minting pennies and nickels, maybe we could put them to work making $1 coins. Because coins are more durable than paper bills, the U.S. Mint estimates it could save $500 million annually if Americans made the switch to $1 coins.
Whether it’s tax cuts, social programs or paying off the national debt, I’m sure you’re thinking of what the government could do with $619 million if it weren’t throwing it away on a senseless currency policy. But making the right changes? It could be worth every penny.