Since then, the U.S. Mint has issued several hundred billion Lincoln pennies, making this the most heavily produced coin in human history. At the direction of Congress, the Mint has been studying potential new compositions that would make the coin cheaper to produce and save the denomination from the scrap heap. The U.S. One Cent coin, or penny, has almost no purchasing power today. Thats what happened in Canada, where the Salvation Army and numerous other charities held drives to collect discontinued pennies in 2013. [34], 5. The Penny Should Abolish The Penny. It's a Money Loser for Retailers. However, 59% of adults polled between June 10 and June 16 of 2004 by Harris Interactive said that they . [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. Pennies are no longer made from pure copper . Accessed Oct. 21, 2020. Some stores are even refusing to accept cash altogether. A zinc penny weighs 2.5 g. Doing the math, 327 billion pennies weigh 1.8 billion pounds [24], Over the last 35 years, 107 million pounds of carbon dioxide have been emitted due to pennies being delivered from the Mint to banks. [7] Raymond Lombra, Professor of Economics at Pennsylvania State University, says the extra rounding charges would exceed $600 million annually and would be regressive, affecting the poor and other disadvantaged people groups disproportionately. [9], One study found that penny rounding in Canada costs grocery store customers an estimated 3.27 million Canadian dollars (2.5 million USD) annually. Common Cents, an organization devoted to keeping the penny, runs an annual Penny Harvest and supports the penny largely because of its importance to charities. [17], You cant buy anything for a penny; vending machines and parking meters wont accept them. 6.9 Reasons Why America Should Get Rid of the Penny - The Balance. The typical store doesn't even have them available for purchase or give them out in change - they flat-out refuse! ", ProCon.org. Why or why not? All rights reserved. (6) The penny has become useless as a means of exchange. [5], Mark Weller, Executive Director of the pro-penny group Americans for Common Cents, says, The alternative to the penny is rounding to the nickel, and thats something that will negatively impact working families every time they buy a gallon of gas or a gallon of milk. [6], The US Federal Reserve found that minorities and low-income people are more likely to use cash than credit cards. 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 . Should the Penny Stay in Circulation? - Top 3 Pros and Cons - ProCon.org It too had very little purchasing power at the end of its life. There's been a debate brewing over the value of the penny, and conversations have grown amid a national coin shortage. 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. She is a member of the American Numismatic Association (ANA) and holds several certifications. For example the article Should we get rid of the Penny 8 Reasons to Keep it vs Eliminate it says,"Design Life-Cycle.org a sight created by students at the University of California, calculates that just transporting pennies to banks-not even counting any other stage of . Americans for Common Cents: The Penny's Importance For Charity, Foldvary Says Keep the Penny; Dump the Sales Tax, US Mint Cost to Produce the Penny and Nickel, Americans for Common Cents: Support for the Penny. The Salvation Army was one of the first charities to hold drives to collect discontinued pennies when the Canadian government announced it would drop its lowest-value coin, due to its cluttering up peoples' pockets. The debate over whether to keep the penny or discontinue it has intensified since the penny crossed the line of one-cent production cost per penny. It will be a lot easier just to keep the penny because then we don't have to tell everyone to change. -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. 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. Additionally, cryptocurrency transactions are incredibly fast and secure, making them ideal for day-to-day payments. We can not guarantee its completeness or reliability so please use caution. 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. Unlock the Ultimate Benefits with the United 1K Guide! She also maintains a personal blog. The new penny, first issued in 1857 with a Flying Eagle design, was about one-third smaller in diameter than the large cent and less than half the weight. Their reasons differ. In 1792, Congress created a national mint authorized to make gold, silver, and copper coins, including the one-cent piece known as the penny. If Cash is No Longer King, What Does that Make Stupid Pennies? NBC's Morgan Radford reports for Weeke. 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. That would cost an estimated $10.9 million more annually than it would cost to keep making pennies. In 2020, the Mint shipped out more pennies than nickels, quarters, and dimes put together over 8 billion coins. The folks who want to retire the penny also have some compelling arguments, including those below. The penny's diminishing role means that it may not be here for much longer - so get rid of those spare coins you have tossed around in your pocket! However, it is removed from circulation when tendered at a Canadian banking facility. Pennies don't buy as much as they used to: In 1913, a penny purchased a little more than a quarter does today (about 28 cents). How Many Coins Are in a Regular Roll of Coins? Are culture would be forgotten shops prices . Companies would need to update their price catalogs. Accessed Oct. 21, 2020. The first penny, known as the Fugio cent, was reportedly designed by Benjamin Franklin in 1787. We like to give back to our local art community by presenting presidential line of succession 2022 - A fresh look at a contemporary and traditional southwestern art work. Analyze the pro argument of Mark Weller from Americans for Common Cents. The total amount doesn't end when coins and citizens are debating the penny and whether or not it should be kept. For example, the mint made the first dime in 1796 that weighed 2.7 g and had 89.24% silver. Often, when we pay with cash at a store, the total amount doesnt end in a multiple of $0.05. To access extended pro and con arguments, sources, and discussion questions about whether the penny should stay in circulation, go to ProCon.org. American Numismatic Association 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. 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. Will todays cent get the same kind of reprieve? Learn how to pay for IVF with these strategies for fertility financing. A Dozen Money Facts You Should Know | Cheapism.com 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. View full document. U.S. Securities and Exchange Commission. Later, in 1944, the Mint switched to making pennies out of zinc-bronze alloy. Lombra also argued that this small change in prices would trigger an increase in the Consumer Price Index (CPI). This organization has conducted polls showing that more than two-thirds of Americans favor keeping the penny. Should Pennies Be Eliminated Research Paper - 539 Words | Bartleby Act, which would stop the minting of the penny for ten years to assess the repercussions. Overall, continuing the use and manufacturing of pennies . Getting rid of the penny would save time since customers wouldn't have to search for their nearest nickel and wait in long lines while customers ahead of them try to count out exact change. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Americans have a love-hate relationship with pennies. First, consumers benefit with a low denomination coin. That adds up to $2,100,000,000 every generation of only pennies. 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.. The primary reason is the soaring cost of metals. In Canada, at least, eliminating the penny has not led to a widespread increase in prices. "IRA FAQs - Investments." A few people groused about it, but commerce continued unabated. For these types of payments, rounding to the nearest nickel would cost consumers an extra 2021 dollars annually. And in February 2014, President Barack Obama argued during a YouTube chat that pennies were obsolete and a symbol of U.S. government waste. The Penny Debate: to Keep Or not to Keep - GradesFixer You have it. Why we should keep the penny. Both sides in the penny debate make some good points, and the solution is far from being an easy decision. However, a newer study by economist Robert Whaples, published by the Eastern Economic Journal in 2007, contradicts Lombras findings. Once the timer stops, you can always click . 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. The cost of making pennies in 2019 was 1.99 cents per coin. [25] A California company called Mikes Bikes has banned the penny from its registers because Making pennies wastes natural resources [and] is toxic to people and the environment. [26], The use of pennies in paying for goods and making change adds time to sales transactions. After only two years, the Flying Eagle cent gave way to the now fondly remembered Indian Head cent. Remember to focus on content rather than grammar or mechanics. The process of making pennies is costly both financially and environmentally. Penny's sentimental value proves priceless - Coppell Student Media The cost of pennies is a minor problem. The only real muscle the electorate has is the vote. Pennys also teach kids about money like there 1, 5, 10, 25, and dollars bills if we didn't have the penny they wouldn't even know what they penney is an advanchley we would forget about . The COVID-19 pandemic could accelerate this trend. I personally think that we should keep pennies for these reasons. It is unclear whether the rounding would be up or down. These coins have become highly sought-after collectibles and in 2010 one sold for $1.7 million - a record amount paid for a 1943 copper cent! Another significant change in U.S. coinage occurred without any catastrophic effects on commerce. 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 United States has eliminated small denomination coins in the past with relatively little trouble. However, while many people are calling for the pennys retirement, others are working just as hard to keep the coin in circulation. In 2013 alone, this cost taxpayers $105 million. Should you need such advice, consult a licensed financial or tax advisor. What Is a Financial Statement Restatement? To learn more, read our article on the possible economic impact of eliminating the penny. How would removing pennies impact people who primarily rely on cash transactions? 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. In 1996, the Government Accountability Office reported that roughly two-thirds of pennies dont circulate at all. 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. If you pay with credit or debit card, it is $7.12. 3. One 2012 survey found that more than two-thirds of the respondents wanted Uncle Sam to keep making them. Managing Editor 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. However, overall, the Mint is a profit-making machine. PDF The Value of a Penny so at 27 cents per ounce, I am going to have about $270 in value. Why We Should Get Rid Of The Penny - The Odyssey Online Charities rely on penny drives as an easy way to raise funds, and pro-penny groups argue that the elimination of the coin would have a negative impact on charitable donations. TD Ameritrade. We also share information about your use of our site with our social media, advertising and analytics partners. [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. To begin with, the Mint itself cant impose such a death penalty. 30, 2012, Army & Air Force Exchange Service, "Retail & General FAQs," aafes.com (accessed July 2, 2018), David Kestenbaum, "What Is Seigniorage?," npr.org, Jan. 9, 2009, Business Wire, "Strong Support for the Penny in Recent Poll," businesswire.com, Apr.