For five consecutive years, it has cost the United States Mint more than what the penny is worth to produce and distribute it. In 2010, the average cost to make a penny was 1.79 cents. Is it worth almost twice the face value to continue making the penny, or should this senseless coin be eliminated?
Soaring prices of copper and zinc are to blame for these rising costs. A penny is made up of 97.5 percent zinc and 2.5 percent copper. In 2005 the cost of a penny barely made a profit at .97 cents. Since then, the price of zinc has increased by almost 40 percent. The nickel has also exceeded its face value at 9.22 cents per coin, whereas paper money only cost six cents per bill to manufacture.
There are a few options to overcoming this deficit. The penny could be reconstructed, eliminated completely, or left as is. Recently, The U.S. Mint has considered redesigning the penny to become more cost efficient. One of the most popular suggestions is to use less expensive metals to make it, such as steel. It wouldn’t be the first time it has been changed. The U.S. Mint has changed the composition of the penny several times since 1793, including in 1943 when it was switched to zinc-coated steel due to a shortage of copper during the war. Another time was in 1982 when they switched to the composition that is currently used today.
You can’t buy anything for a penny, so why alter it when it can be eliminated completely. There are several contradictions to abolishing the penny entirely. Some feel much attached to the penny; it holds symbolic value. U.S. Mint Director Edmund Moy states, “People still want pennies, which is why we’re still making them.” If the penny was eliminated, there would be no more lucky pennies, a penny for your thoughts, or getting your two-cents worth. Others feel if the penny was removed that the poor would become poorer due to retailers rounding up to the nearest nickel. They would be forced to pay cash because they don’t have checking accounts or credit cards. Another concern is that charitieswould suffer without the penny. Would the community be as willing to part from their nickels as they do with their pennies?
On the contrary, there has been success in eliminating coins. In 1992, Australia stopped issuing one and two cent pieces, Brazil eliminated one cent coins in 2005, Britain abolished the half-cent coin in 1983, and Hong Kong stopped making its five cent coin in 1980.
Another option could be to leave the penny alone. In 2010, the U.S. Mint produced 3,487 million pennies. Almost 35 million dollars worth of pennies costs over 62 million dollars to produce. Could those 27 million dollars be put towards the nation’s debt? Some would say that amount is chump change compared to the trillions of dollars of debt owed.
Out of all of these options, I do not feel that leaving it alone is an option. Making cents does not make sense! Something has to be done; change needs to happen. Redesigning the penny and lower the cost of production is a good thought. If the U.S. Mint feels that American’s need the penny, then this would be the best option. We’ve adapted to the changes in the penny in previous years, so I do not see why we couldn’t again.
Personally, I think the penny should be eliminated from circulation. They are a bother and useless. Nothing costs a penny, you can’t use them in a vending machine, and when you dump out your pennies to pay for something at a store, you hear the cashier sigh. Jeff Gore, a young scientist at MIT, developed an equation of productivity to figure out how much time people waste on pennies. He came to the conclusion that 2.4 hours per year per person is wasted dealing with pennies, whether it’s counting them out in stores, giving them back in change, or fishing them out of the couch and putting them in a penny jar.
Without pennies, there is a way to even out rounding without losing a couple cents on every transaction. First of all, the loss of the penny will only relate to cash transactions. Debit cards, credit cards, checks, and direct deposits can all still utilize the cent. Next, I believe if cash transactions are rounded up and down, it’ll even out for everyone, the retailer and the consumer included. No cents will be lost. For cash transactions ending in 1 or 2, the total price will round down and for transactions ending in 3 or 4, then the total price will round up.
Although there are many opinions about whether or not the penny should be removed from circulation, I think most would agree that losing millions of dollars per year should not be an option. What does the penny mean to you? The next time you see a penny on the ground, are you going to pick it up or keep on walking?