May 23 was Lucky Penny Day, and the penny is lucky indeed. Consider that they’re still being made today, even though they lost their usefulness long ago. In fact, the government spends millions to turn out a new supply, even knowing a penny isn’t even worth a penny. Here are seven reasons to put an end to the penny.
1. It’s a Money Loser for the Government
Back in 1909, when the penny was introduced for the centennial of Lincoln’s birth, it was made with 95% copper. And because copper had strong market value then, each penny was actually worth 2.5¢.
Copper is still valuable today, but pennies aren’t. In 1982, the copper content of pennies was reduced to just 2.5%. The rest is inexpensive zinc. But even this cost-cutting move hasn’t helped; our 1¢ costs 1.8¢ to make.
The government currently spends $46 million on minting pennies every year.
It’s worth nothing that several countries have started the process of removing the penny from their currency: Canada, Australia, Russia, Belgium, Italy, the Netherlands, and Brazil.
2. It’s a Money Loser for You
The penny can buy nothing of value today. Its purchasing power is so low, it’s provided free for the taking in many stores. And, as economist Greg Mankiw has observed, “When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful.”
Today, the average hourly wage in the U.S. is over $22 an hour. Which means the average worker earns 6/100ths of a cent every second. If you take three seconds to stop pick up a penny, you’re losing money, not gaining it.
The reasons the government has to produce so many new pennies each year is because Americans simply discard them, or use them to fill jars.
3. It’s a Money Loser for Retailers
The job of counting, sorting, and hauling around pennies represents added expense for cashiers and store managers. Thirty years ago, our defense department prohibited the use of pennies at military bases overseas. When officials considered the weight of pennies, they determined the coins simply weren’t worth the cost of shipping them to or from foreign countries.
4. Vending Machines Don’t Want Them
The only machines still willing to accept pennies are at toll booths, notably those in the Land of Lincoln.
5. We’re Moving Away from Currency
As of 2016, only 24% of Americans reported making most or all of their purchases with cash, down from 36% five years earlier, according to Gallup.
6. We Have a Precedent for Eliminating Worthless Coins
America began minting half pennies in 1793. By 1821, when the Post began publishing, the coin had the purchasing power of today’s dime. But by 1857, the half penny had lost so much value, the mint ceased its production.
7. We Won’t Forget President Lincoln
He’s still on the $5 bill, a piece of currency that’s far more worthy of the 16th president.
So why does the U.S. Mint continue turning out pennies? Partly it’s sentiment. Most Americans have an attachment to the coin and want to see it remain in circulation. They remember collecting pennies as children and that memory lingers.
Another reason is the government’s resistance to reducing inefficiency. As President Obama said in 2014, “One of the things you see chronically in government, it’s very hard to get rid of things that don’t work so that we can then invest in the things that do.”
Not all pennies are useless. In 2010, a rare 1943 penny sold for $1.7 million. That alone might be a good enough reason for following the old adage, “find a penny, pick it up” (while you still can).