Say good-bye to the penny
It&rsquo;s had a good run, but it&rsquo;s time to bid it farewell.
The Editorial Board
Mon, 10 Aug 2020 04:00:00 GMT
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Those ubiquitous plastic containers near the convenience store cash registers usually carry a similar message: “Have a penny, leave a penny. Need a penny, take a penny.”
How about, instead, we just do away with the penny?
The coronavirus pandemic brought out a somewhat-unexpected call for people to stop hoarding change and put it back in circulation. The shortage came about because as businesses closed and economic activity slowed, the circulation of coins dropped significantly. And the U.S. Mint decreased staffing during the pandemic, meaning fewer coins were made.
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With businesses reopened, the demand for coins exceeds supply, so it’s not unusual to see signs posted at many establishments asking for your coins, or payment by debit or credit card.
This may be the best opportunity to ask why we still have the penny as a means of currency and why not follow the lead of other countries — Canada, New Zealand, and Australia, for example — that have already discontinued use of a 1-cent coin?
There are many good reasons to say good-bye to the penny, the most obvious of which is that nobody wants them or carries them around anymore. They have little buying power, and you can’t use them in vending machines, parking meters, or most toll-booth collection baskets. Even the U.S. military recognizes the uselessness of the penny, having already eliminated its use at overseas bases.
From a financial standpoint, the penny is a losing proposition, costing nearly 2 cents to make a 1-cent coin. In 2019, the U.S. Mint made over 7 billion pennies, at a cost of more than $145 million.
Americans throw away or lose more than $62 million in change each year, by one estimate, and most of that is in pennies that are tossed into fountains, lost in the sofa cushions, or just dropped on the street.
Without the penny, the logical move would be to round purchases up to the nearest nickel (which, by the way, also costs more to produce than it’s worth). That would mean a purchase might cost 2 cents more if rounded up, or 2 cents less if rounded down. Either way, researchers say it would have little, if any, economic impact.
There have been repeated attempts to eliminate the penny in cash transaction, with proposals in the U.S. House in 1990, 2001 and 2006, all of which failed, despite public support. As recently as 2017, the late Sen. John McCain proposed an end to minting pennies for a 10-year period, followed by a study of the coin’s future.
The penny has been in circulation since 1793 and featured the face of Abraham Lincoln since 1909. It’s had a good run, but it’s time to bid it farewell.