10 reasons why we should keep the penny

Without pennies, the Mint would be forced to make more five-cent pieces. Analyze the pro argument of Mark Weller from Americans for Common Cents. Beyond the excess millions the U.S. Mint spends to crank them out, pennies also take up the lions share of the Mints production capacity. In 1857, the U.S. Mint stopped making the half-cent coin, partly because the cost of making it had exceeded its face value, and somewhat because it was considered to be too small a denomination and it was no longer needed. In fact, it has been struck in greater numbers than all other coins combined including not just U.S. coins but the coins of all other countries throughout recorded history. It would also cause prices to rise. In 2021, the Mint made 7.60 billion pennies, costing taxpayers $145.8 million. Chipotle restaurants have already taken this initiative by simply rounding bills off to the nearest nickel, but when management decided to do this some customers complained about paying extra cents added on their bills. The United States Mint makes over 20,000,000 pennies per day, or 7,000,000,000 pennies per year. Producing the penny costs taxpayers money: In 2021, each penny produced cost 2.10 cents to make and distribute. Of course, spending $0.018 to make a coin thats worth only $0.01 isnt necessarily a bad idea because coins are reusable. Economist Greg Mankiw of Harvard University argues that if people start leaving pennies at cash registers due to their lack of purchasing power (in 2020 dollars, 15 pennies would be worth one monetary unit), then maybe then the useless halfpenny will finally be stamped out too. Companies would need to update their price catalogs. The U.S. Mint does lose money on pennies and nickels. The rust should come right off! However, this only works if the coins actually do circulate and pennies, as noted above, often dont. In some respects, we can make the same argument for the paper dollar. 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. Shops' reluctance to accept cash payments, coins included, has disempowered people experiencing homelessness, who often don . Anti-penny advocates are fond of pointing out that today, the penny costs taxpayers more to produce than its actually worth. The change from brass, the previous composition, took place in 1982 as a cost-cutting measure because zinc was much cheaper than copper. 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. How Much Is My Modern Jefferson Nickel Worth. The cost of producing them is higher than face value. Economist Robert Shapiro estimated in a 2017 paper that it costs 55 times more to make pennies than the value of each coin itself. Accessed Oct. 21, 2020. Pennies are so hard to spend that many people dont even bother they just store them all in jars, or even throw them away. And as it grows ever easier for charities to accept donations electronically, coin drives are likely to play a diminishing role in fundraising. When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful. [19] Former US Mint Director Philip Diehl said, [T]he value of a penny has shrunk to the point that, if you earn more than the minimum wage, youre losing money stopping and picking up a penny on the sidewalk. [20], Comedian John Oliver noted, Two percent of Americans admitted to regularly throwing pennies in the garbage, which means the US Mint is spending millions to make garbage. [21] Two-thirds of the billions of pennies produced are never seen in circulation again once they reach a consumer via the bank. Additionally, the United States Mint changed the silver composition and weight of many coins due to the increasing price of silver. 10 reasons why we should keep the penny . Although these arguments aren't based on factual evidence, there is something to be said for keeping the penny around. A dollar coin can last up to forty years. Back in 1857, the U.S. Mint stopped producing half-cent coins which, according to the historical information calculator at MeasuringWorth.com, had a purchasing power of $0.15 in 2020 dollars. A 2019 poll by Americans for Common Cents found even stronger numbers in favor of pennies, saying 68% of adults want to see the penny remain legal tender. There are reasons for the elimination of the penny, mostly having to do with the inconvenience of the small coin. Their reasons differ. The ubiquitous one-cent coin has been a part of our everyday lives for over two centuries - and some argue that it's time to get rid of it. He argues that there are three main reasons for keeping the penny: Without it, we would become more reliant on the . For instance, penny supporters claim that eliminating the coin could harm the economy or hamper charities in their fundraising efforts. Steel and aluminum are two alternative metals that have been mentioned. [17], You cant buy anything for a penny; vending machines and parking meters wont accept them. ProCon/Encyclopaedia Britannica, Inc. OTC Markets. 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. First, consumers benefit with a low denomination coin. The Fascinating Journey of the United States Penny, Penny Stocks Trading Guide: A Beginner's Primer, Creating an LLC NJ: A Simple, Step-by-Step Guide. Although originally made of pure copper, pennies today are composed of 97.5% zinc and 2.5% copper. 10 reasons why we should keep the penny. However, 59% of adults polled between June 10 and June 16 of 2004 by Harris Interactive said that they . There are precedents for getting rid of coins that are too small to use. 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. The melt value of a zinc penny is one-half of a cent. At no point did it rise above its historical average of 3.2%. Finally, small-change drives arent a cost-effective way for charities to raise funds. Since 2006, Jarden has given $1.2 million to Americans for Common Cents (ACC). List two to three ways. In 2013 alone, this cost taxpayers $105 million. For people making over $100,000 those few extra cents don't matter. Since then, the U.S. Mint has issued several hundred billion Lincoln pennies, making this the most heavily produced coin in human history. According to William Safire, in 1950 a penny would buy what a dime would buy today. Please refer to the appropriate style manual or other sources if you have any questions. 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. Discover what happens, how to avoid it, and what you can do if it's too late. From an economic standpoint, it simply doesn't make sense to continue producing these coins. In Canada, at least, eliminating the penny has not led to a widespread increase in prices. Unlike some other foreign governments, the penny remains legal tender in Canada. Copper, which makes up the other 2.5 . 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. If that is the case, then people would be less willing to part with spare change for charitable drives. A low-denomination coin helps keep prices in check. They support keeping the penny because pennies represent the most expendable part of pocket change. The penny is an important part of our history and culture. Another piece of evidence against Lombras claims comes from Canada, which stopped minting its penny in 2013. November 29, 2022; did jesus walk on water before or after his resurrection . If consumers in 1857 could get along without halfpennies, then modern consumers can almost certainly manage without a coin thats worth less than one-tenth as much. And in February 2014, President Barack Obama argued during a YouTube chat that pennies were obsolete and a symbol of U.S. government waste. Without pennies to make exact change, prices would have to be rounded up or down to the nearest nickel and skeptical Americans fear that most of the rounding would be up, increasing the cost of much of what they buy. The problem is, too many believe the present administration and government in D.C. is reasonable, when its actually FUBAR. [23], Making pennies also has environmental consequences from mining and transportation. If the penny is discontinued, then merchants must round all prices. The content on Money Crashers is for informational and educational purposes only and should not be construed as professional financial advice. Why or why not? 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. Is My Penny Solid Copper or a Copper-Plated Zinc Cent? )," YouTube.com, Sep. 6, 2010, Greg Mankiw, "Get Rid of the Penny!," gregmankiw.blogspot.com, Apr. Second, once pennies drop out of circulation, the nickel will become the lowest-value coin cluttering up peoples pockets. And in 1982, it virtually reversed the percentages of zinc and copper, in the process reducing the weight of the coin to its present 2.5 grams. Creating the penny releases C02 into the air. However, it doesnt say what those reasons are. 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. [ 36 ] 6. The mint produces billions of these coins every year. 325 N. LaSalle Street, Suite 200 None of these changes caused any significant problems in commerce. References to products, offers, and rates from third party sites often change. In the rare case you have never heard of or used a penny, it is the one cent coin in U.S. The penny debate gained renewed attention when the coronavirus pandemic led to a nationwide coin shortage as consumers moved towards contactless payment methods. The impact of the loss of the penny on price flexibility depends on its implementation. If you have ten pennies for one reason or another, they will still be accepted and you can use them. Read more to learn about the potential benefits of eliminating the penny. Its the only coin we have that has Lincolns face on it! Both sides in the penny debate make some good points, and the solution is far from being an easy decision. It was first authorized in 1776 to help fund the Revolution. Nickels cost even more to make - If we eliminate the penny, we will need more nickels in circulation. You're saving it. That means the cost of some items would go up. 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. After only two years, the Flying Eagle cent gave way to the now fondly remembered Indian Head cent. The Canadian government stopped producing pennies in May 2012, and the Royal Canadian Mint ceased the distribution of them as of February 4, 2013. In 1943, the Mint produced cents made of zinc-coated steel in order to conserve copper, a metal vitally needed for military uses during that pivotal year at the height of World War II. As the U.S. Mint explains, the copper surface of a penny accounts for only 2.5% of its metal content. "Current Market." The group's mission is to keep the penny in use. 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. Dominic is passionate about writing stories that have the power to make a difference in peoples lives. The COVID-19 pandemic could accelerate this trend. 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. the penny under one cent. 5. Americans for Common Cents, the pro-penny group funded by the zinc industry, calls the claim absurd. In the first place, the group argues, employees who spend less time counting out change wont necessarily spend it on other, more useful tasks. March 10, 2016 Should we keep the penny or not? [15], Common Cents, a nonprofit based in Dallas, TX, has run a Pennies from the Heart program for 20 years, and the student-led efforts have raised over $850,000 for local charities. After 1962, pennies were no longer made of copper or bronze but instead were minted from 97.5% zinc with 2.5% copper coating. Add it all up, and it comes to more than 25 million hours wasted each year. 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. 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. 4. Any action you take based on the information found on cgaa.org is strictly at your discretion. That will save Canadian taxpayers $11 million a year, our northern neighbors government reports. Additionally, cryptocurrency transactions are incredibly fast and secure, making them ideal for day-to-day payments. Thats what happened in Canada, where the Salvation Army and numerous other charities held drives to collect discontinued pennies in 2013. Consider how you felt about the issue before reading this article. 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. However, while many people are calling for the pennys retirement, others are working just as hard to keep the coin in circulation. The decision to discontinue it would incur political backlash. Learn how to keep it safe. 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.. Some say the United States should stop using pennies because the cost of producing the coin is now higher than the value of the coin. Dominic Townsend is a successful article author based in New York City. At the time it was eliminated, the useless halfpenny could buy as much as 15 pennies can today. Aaron notes in a Brookings Institution editorial that eliminating pennies would help with cash transactions as well, since it would make calculations easier without having to deal with fractions of cents. However, overall, the Mint is a profit-making machine. 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. -Prices will increase because all purchases will have to be rounded to the . That makes them a much more cost-effective way to honor Lincoln than a penny that costs $0.018 to mint. Accessed Oct. 21, 2020. The penny is an essential part of our nation's monetary system, and it helps to keep commerce flowing smoothly. Shops wouldn't get money from you and you can save up. The U.S. One Cent coin, or penny, has almost no purchasing power today. 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. In fact, during that year the Mint accidentally made 40 copper pennies! They dropped the penny and rounding happens just the way you learned in like 2nd grade. A HuffPost/YouGov poll conducted in January found that only 34 percent of Americans are in favor of eliminating the penny, while 51 . The penny is an interesting coin to discuss. In 1857, the half-cent had the purchasing power that would translate to well over ten cents today, so in some ways, it was akin to our eliminating the dime. We can not guarantee its completeness or reliability so please use caution.

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