You’ve probably got a jar of them sitting on your dresser. Or maybe they’re just rolling around in your cupholder, sticky with spilled soda and grit. We’re talking about the one-cent coin. For years, people have been whispering—or shouting—that the penny is going away, yet it lingers like a guest who doesn't realize the party ended three hours ago.
It’s a weird situation.
The U.S. Mint keeps churning them out by the billions. Literally billions. In 2023 alone, the Mint produced over 4.5 billion pennies. That’s a lot of copper-plated zinc for something most people won’t even bend over to pick up off the sidewalk. Honestly, the penny has become a fiscal zombie. It’s dead in terms of purchasing power, but it’s still walking among us, costing taxpayers a fortune every single year.
The Ridiculous Math of Making Cents
Here is the kicker: it costs way more than a cent to make a cent.
According to the U.S. Mint’s 2023 Annual Report, it costs about 3.07 cents to produce a single penny. Read that again. We are spending three cents to create one cent of value. If any private business ran its manufacturing line that way, they’d be bankrupt before lunch. This isn't a new problem, either. The cost of production crossed the one-cent threshold back in 2006 and hasn't looked back.
Why is it so expensive? Metal prices.
The penny is 97.5% zinc and 2.5% copper. While copper gets all the glory, the price of zinc is what really drives the Mint’s headaches. When global commodity prices spike, the "seigniorage"—the difference between the face value of money and the cost to make it—goes deep into the red. We are essentially burning millions of dollars a year just to keep a coin in circulation that most vending machines won't even accept.
Canada Already Did It (And the Sky Didn't Fall)
Our neighbors to the north already figured this out. Canada officially stopped distributing their penny in 2013.
They didn't just wake up and decide to be brave; they looked at the math and realized they were losing $11 million a year. So, they killed it. Cash transactions are now rounded to the nearest five cents. If your coffee is $2.02, you pay $2.00. If it’s $2.03, you pay $2.05. It’s simple. Digital transactions—credit cards, debit, Apple Pay—stay exact to the cent.
No one panicked. The Canadian economy didn't collapse. Inflation didn't skyrocket because of "rounding up." It was a non-event that saved their government a massive amount of overhead.
The Lobbyists Keeping the Penny Alive
So, if the math is bad and other countries have shown us the way, why is the penny is going away taking so long in the United States?
Enter the lobbyists.
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There is a group called Americans for Common Cents. It sounds like a grassroots organization of nostalgic patriots, but it’s largely funded by Jarden Zinc Products—the very company that sells the zinc blanks to the U.S. Mint. They argue that the penny prevents "rounding taxes" on the poor and that its removal would cause inflation.
Economists like Robert Whaples from Wake Forest University have spent years debunking this. Whaples’ research suggests that rounding is essentially a wash. Sometimes the consumer wins, sometimes the merchant wins. Over a year of transactions, the difference is pennies. Literally. But the fear of a slight price hike is a powerful political tool.
Then there’s the charity factor. Organizations like The Leukemia & Lymphoma Society have historically relied on "Pennies for Patients" campaigns. They argue that people give pennies because they’re "worthless," and those small donations add up to millions. If the penny vanishes, does that loose change donation vanish too? It’s a fair question, but in a world where everyone is tapping their phone to pay, it's becoming less relevant.
The "Military Precedent" You Didn't Know About
Here is a fun fact: the U.S. military has already "killed" the penny in some places.
On overseas military bases, AAFES (the Army and Air Force Exchange Service) stopped using pennies decades ago. Shipping heavy boxes of one-cent coins to a base in Germany or South Korea is incredibly expensive. It just didn't make sense. So, they round. If you’re a soldier buying a snack in Ramstein, you’re already living in a post-penny world.
If the Pentagon can handle rounding, surely the rest of us can.
The Inflation Argument
The biggest hurdle is the psychological tie to the "price" of things. People worry that if the penny goes away, the $0.99 price tag becomes $1.00.
But think about it. What can you actually buy for a penny? In 1950, a penny had the purchasing power that about 13 cents has today. We haven't had a half-cent coin since 1857. When the U.S. got rid of the half-cent, it had more purchasing power than the penny does now. Getting rid of useless denominations is a standard part of a maturing economy.
We aren't losing money; we're losing a nuisance.
What Happens to Your Penny Jars?
If the government finally pulls the trigger, your pennies don't become worthless overnight. They would remain "legal tender," meaning you could still spend them or take them to a bank. Eventually, the Fed would stop redistributing them. They’d be collected, melted down, and sold for their metal content.
Collectors might hold onto the rare ones—like the 1943 copper-alloy cent or the 1909-S VDB—but your standard 2022 Lincoln cent? It’s just scrap metal in waiting.
The Nickel Problem
There is one big catch to getting rid of the penny. The nickel.
If we ditch the one-cent coin, the five-cent coin becomes the new "small" denomination. The problem? The nickel is also a loser. It currently costs about 11.5 cents to make a five-cent piece. If we eliminate the penny without fixing the nickel, we might just be shifting the deficit from one coin to another. Some experts suggest we should move to a "decimal-less" cash system or change the metal composition of all our coins to something cheaper, like steel.
Actionable Steps for the "Change" Transition
The penny might not be legally dead yet, but you can start phasing it out of your own life to save time and clutter.
- Empty the Jars Now: Don't wait for a federal mandate. Take your coins to a Coinstar, but don't pay the fee. Most machines will give you a gift card (like Amazon or Starbucks) for the full value without taking a percentage cut.
- Go Digital: The easiest way to avoid the penny is to stop using cash. Digital payments are always exact, avoiding the "rounding" debate entirely.
- Donate the Physical Change: If you have bags of pennies, many local schools and charities still run "penny drives." It’s the most efficient way to turn that heavy metal into something useful for your community.
- Check for Key Dates: Before you dump them, look for pennies from before 1982. Those are 95% copper and actually have a melt value of about 2.5 cents. While it's technically illegal to melt them for profit right now, they are a better "store of value" than the modern zinc versions.
The reality is that the penny is going away—not with a bang, but with a slow, grinding fade. The U.S. Treasury is famously slow to change, but the math is becoming impossible to ignore. We are paying for the privilege of carrying around pocket trash. It’s time to let it go.
Keep an eye on the COIN Act and similar legislation in Congress. Every couple of years, a brave representative introduces a bill to suspend penny production. It usually dies in committee, but as the cost of zinc continues to climb, the pressure to stop the bleeding will eventually outweigh the nostalgia of the copper-colored coin.
Next Steps for You: Start by sorting your current coin stash. Separate any "wheat pennies" (1958 and older) as they carry a collector premium. For the rest, use a fee-free Coinstar redemption to turn that dead weight into usable digital currency. If you're a business owner, consider implementing a "round to the nickel" policy for cash transactions to see how your customers react; most find it more convenient than fumbling for small change.