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7 Reasons to Get Rid of the Penny

Published: May 23, 2018

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).

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  • Kirk, I wish retailers would do that; with the amount including sales tax be to the nearest whole number or one ending in a 5, 15, 25 etc. As it is, I use my VISA debit card for nearly all purchases over $5.

    When I DO use cash at Sprout’s buying groceries and vitamins, it’s almost always in conjunction with the card, where no change would be involved anyway.

    Say for example, my checking account (on a particular day) can’t handle the $57.75 withdrawal from it, I always have extra $10s and $20s in my wallet just for those occasions to reduce the amount being taken out with the card.

    We are largely a cashless society now, but in an instance such as I mentioned, cash itself is still important. (I also know how VERY nice it is to be paid ‘under the table’ in cash).

    If it isn’t one kind of crime involving money, it’s another. Eliminating cash would decrease bank robberies (not jewelry store stores though) but cyber money crimes would become a bigger problem than they are now, which is considerable. This is why we have to look at our bank accounts online everyday to check for fraud, and get on it immediately if needed.

    Also, it’s really NOT a good idea to try to do your banking with smart phone apps. It’s just what cyber hackers are looking for. If you don’t have automatic deposit, thou best taketh thy check to the branch with a deposit slip and get thy receipt on paper.

  • Donald Barnett

    I simply leave pennies on the counter or put them in a contribution jar that is often at checkout stands.

  • Kirk Rasmussen

    Retailers would simply set prices so that, with sales tax, the amount would round to the nearest whole number in your change. $7.12 would be $7.10, for example. But soon enough we will become a cashless society, which would enormously reduce crime. The times they are a-changing. . . .

  • We still need them for getting exact change back when making store purchases using cash; that’s the thing. And, if something’s $7.12, it’s nice to have a dime & 2 pennies handy rather than breaking another dollar and having 88 cents weighing down your pocket.