They can be found at the bottom of a purse, on the ground at a grocery store and at the back of a dryer. They are collected by children and saved in piggy banks everywhere; yet, they are seldom used. Pennies are plentiful in today’s world, but are these coins actually useful in society?
Pennies are primarily composed of zinc, which gives them a total production cost of approximately 1.66 cents per coin. According to the U.S. Mint, about 8 billion pennies were produced in 2017. This puts the total cost of production at roughly $143,324,732; in other words, the U.S. loses around $143 million each year due to penny production. So, why are they still in circulation?
The simple answer is that Americans like them – getting rid of pennies would be a change, which is always viewed with some reluctance from citizens. But going further than that, they hold a sentimental value to most people. The memories of saving pennies in piggy banks are still valued by Americans, and perhaps it is this reason that keeps the coins alive. However, this does not necessarily serve as a reason for them to stick around. In truth, pennies collect in the pockets of citizens and are hardly ever used in day-to-day transactions.
Of course, there is some pushback to the proposal of stopping penny circulation. Some maintain that halting production of the penny would lead to rising costs, as prices would then need to be rounded up to the nearest 5 cents (for example, an item currently priced at $7.96 would round up to eight dollars, costing the consumer 4 extra cents).
This price increase, while certainly making transactions simpler to calculate, would be a difficult adjustment for U.S. citizens. It would also spur an increase in the production of nickels, which are also expensive to produce (about 6.23 cents per coin). The pro-penny perspective states that this would do nothing but offset the money saved from stopping penny manufacturing. Essentially, in order to cease the production of pennies, the same would have to be done for nickels in order to truly save the money that is lost in their production.
However, the use of coins in general is becoming a rarity. With the surge in technological alternatives such as debit cards and online transactions, the use of any type of coin is waning.
Some have a sentimental attachment to these small coins; it is argued that they serve to commemorate President Lincoln, as his face is imprinted onto them. However, it could be argued that Lincoln is celebrated in many ways throughout the country, from the Lincoln Memorial to the $5 bill. The presence of his face on a small coin that is barely used in the economy seems to be a minimal celebration in comparison to these tributes.
All things considered, the costs of creating pennies seem to outweigh the benefits. If the economy is suffering due to the production of the very thing that fuels it, a revision should be made to prevent more money from being lost. Then, perhaps, pennies will be found in museums rather than between couch cushions.
Photo by Kyle Nelson
