The story of the penny began in 1792 when the first U.S. mint produced the coin along with the quarter, dime, half-dime, and half-penny. Pennies of this time were created out of 100% pure copper, whereas today pennies are 5% copper and 95% zinc. This debasement is largely due to the rising value of copper and the face value of the penny dropping due to inflation. The year 2006 marked the first time the intrinsic value of the metal in pennies became worth more than one cent; according to the United States Mint 2018 Annual Report, it costs the U.S. Mint 2.06 cents to produce and distribute a penny with a face value of 1 cent. The same report states that the U.S. Mint lost $85,500,000 in 2018 on the production of pennies.

The penny is also the least valuable circulated coin to ever exist in U.S. history. When the half-penny was phased out in 1857, it was worth the equivalent of 14 cents in 2018’s currency. Furthermore, the median wage in the U.S. was $27.99 per hour in July 2019, according to the Bureau of Labor Statistics. This means it takes less than two seconds for the average earner to earn one cent. In any given transaction, if it takes more than two seconds combined for all parties to locate and transact pennies then there is a net loss in the value of peoples’ time. Specifically, Robert Whaples, a professor of economics at Wake Forest University, estimates a $300 million annual loss for Americans for time spent transacting pennies.

Economist Greg Mankiw says that "The purpose of the monetary system is to facilitate exchange, but...the penny no longer serves that purpose." This concept is prominently shown by the fact that vending machines, toll booths, parking meters, laundry machines, or many other machines do not accept pennies because the time it takes to count, store, and transport these coins is literally not worth the effort.

The chief emotional arguments for keeping the penny are that pennies honor Lincoln and Americans like the penny. Discontinuing the penny would not dishonor Lincoln; his place in history has been established by his life and he is also on the five-dollar bill. According to a 2014 poll conducted by YouGov, only 51% of Americans are in favor of keeping the penny. This poll also has a 3.8% margin of error, meaning it would be dubious to assume even a simple majority of Americans still want the penny in circulation.

The most contentious issue with eliminating the penny is the concern that without the penny, prices will rise and charities will lose money. Fear not, because data proves otherwise. New Zealand, Australia, Finland, and the Netherlands all eliminated their one-cent coins while implementing a rounding rule for all cash transactions to the nearest 5 cents (10 cents in New Zealand) and saw no noticeable rise in prices or drop in charitable donations. In the U.S, research by Whaples, using data on nearly 200,000 transactions from a multistate convenience store chain, shows that rounding would have virtually no effect. Consumers would actually gain a tiny amount – about one-fortieth of a cent per transaction.

The U.S. Mint has only one sole supplier of zinc, the metal which pennies are almost entirely created from. That supplier is Jarden Zinc Products. According to the Senate Office of Public Records, between 2006 and 2019 Jarden Zinc Products has spent over $2,200,000 on lobbying efforts, including for issues related to the one-cent coin. Some speculate their efforts to play a part in why we still have the coin today.

Eliminating the penny from circulation and halting production would save Americans time and money. Andrew Yang, a 2020 Democratic presidential candidate, has endorsed eliminating the penny because of its negative impacts on the economy. With leaders endorsing abolishment and math acting as an enemy of the penny, it is time we withdraw this coin from circulation.









Citations

"2018 Annual Report" (PDF). United States Mint. p. 10. Retrieved October 21, 2019.

Dubuque, From Joe Koch Pheasant Lane,. "Letter: For change, do away with the penny". TelegraphHerald.com. Retrieved October 21, 2019.

“Lobbying Spending Database - Jarden Zinc Products, 2019.” OpenSecrets.org, 23 Oct. 2019, www.opensecrets.org/lobby/clientsum.php?id=D000052514&year=2019.

"May 2017 National Occupational Employment and Wage Estimates United States". U.S. Bureau of Labor Statistics. March 30, 2018. Retrieved October 21, 2019.

Moore, Peter. “Poll Results: Pennies.” YouGov, YouGov, 10 Jan. 2014, today.yougov.com/topics/politics/articles-reports/2014/01/10/poll-results-pennies.

“Table B-3. Average Hourly and Weekly Earnings of All Employees on Private Nonfarm Payrolls by Industry Sector, Seasonally Adjusted.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 4 Oct. 2019, www.bls.gov/news.release/empsit.t19.htm.

Whaples, Robert. "Time to Eliminate the Penny from the U.S. Coinage System: New Evidence," Eastern Economic Journal, vol. 33, issue 1, pp. 139–146 (2007).

Yang, Andrew. “The Penny Makes No Cents - Yang2020 - Andrew Yang for President.” Yang2020, www.yang2020.com/policies/no-pennies/.