ALPHARETTA, Ga. — 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.
For years now, groups like the national Coin Coalition have lobbied Congress to ditch the penny.
And they’re not alone.
The Citizens Against Public Waste argues that suspending production of the penny would save taxpayers $1 billion over the next decade. The National Association of Convenience Stores claims that pennies extend transactions by up to two hours a year for those of us who use them.
When I told a friend about the war against the penny, he asked: “How will the boss pay me?”
I would argue that pennies perform a valuable function in society. Where can you find a cheaper bribe for a child? More importantly, pennies provide a thrifty history lesson when you interest a youngster in collecting.
The U.S. penny — or cent piece — was introduced in 1793. Lady Liberty graced its face until 1859 when the so-called Indian head coin was minted. Then, to honor his 100th birthday in 1909, Honest Abe took his place on the cover – and his seat on the back of the coin.
Throughout most of its life, copper has been the primary ingredient in pennies. It is said George Washington donated an “excellent copper teapot” to add to the bullion mix for the country’s first batch of cents and half-cents.
The coin’s greatest moment came during World War II. Concerned with a national shortage of copper to help our war effort, the U.S. Treasury changed the coin’s makeup to zinc-coated steel in 1943. These steel pennies did more than preserve a valuable resource. They reminded everyone — through every purchase — that there was a war on. Try doing that with mailers.
In 1982, the U.S. Mint changed the primary composition of the penny from copper to zinc.
Since then, the furor against the penny has grown.
“Today, if it rained pennies from heaven, only a fool would turn his umbrella upside down!” Princeton economist Alan S. Blinder commented as far back as 30 years ago.
The U.S. Mint produces anywhere from 2 billion to 8 billion pennies a year. The government estimates there are about 400 billion pennies in circulation. About 6 billion are lost each year.
Where do they go?
They go into seat cushions and wishing wells.
They are flattened on railroad tracks, tucked behind fuses and pitched to the lions at the zoo.
Imagine a world without the penny.
Sales taxes would climb to the nearest nickel. Gas prices would end in a zero. And, in a world already devoid of good notions, the price of a thought would quintuple.
It’s not worth much, but a penny pays its way.
Without complaint, pennies hold down the cost of the millions of trivial things we’d resent buying for an extra nickel. They fill your kids’ piggy banks, repurpose mason jars and make possible a friendly game of poker.
That’s why five pennies will never equal a nickel. Five pennies are, in fact, priceless.