You probably have a jar of them. Or maybe a glass bowl gathering dust on your dresser, or a few sticky ones wedged into the cup holder of your car next to a stray french fry. They’re basically heavy, copper-colored trash at this point. Nobody wants them. We don’t even like carrying them. When was the last time you actually felt excited to get four cents back in change from a cashier? Probably never. It’s time to face the music and stop making the penny because it’s literally costing us more than it’s worth.
Actually, that’s not an exaggeration. It's a mathematical reality that the U.S. Mint deals with every single year.
The Ridiculous Economics of One Cent
Back in 2023, the U.S. Mint released its annual report, and the numbers were sort of staggering. It cost about 3.07 cents to produce a single penny. Think about that for a second. We are spending over three cents to manufacture something that is only legally worth one cent. It’s a guaranteed loss on every single coin that rolls off the press. In the 2023 fiscal year alone, the Mint lost roughly $93 million just by making pennies.
Why? Because the price of metals doesn't care about our nostalgia.
The penny isn't even mostly copper anymore; it’s about 97.5% zinc with a thin copper plating. Zinc prices fluctuate, but they’ve stayed high enough to make the penny a massive money pit. We’ve been stuck in this loop for years. Since 2006, the cost of the materials and the labor to strike these coins has exceeded their face value. It’s a business model that would get any CEO fired in about five minutes.
The Opportunity Cost is Real
It isn’t just about the raw material cost. We have to talk about time. Think about how long it takes for a cashier to count out pennies or for a person in line to dig through their pockets for that final cent to make it an even dollar. Research by Greg Mankiw, a Harvard economist who once advised the White House, suggests that if you value your time even at a minimum wage level, the seconds you waste handling pennies are worth more than the penny itself.
If you drop a penny on the sidewalk, do you stop? Most people don't. It’s not worth the effort of bending down. We’ve essentially reached a point where the physical labor of picking up the currency is more "expensive" than the currency’s purchasing power.
Why Do We Still Have It?
You’d think "losing $90 million a year" would be enough to end the program, but things are never that simple in D.C. There’s a lot of weird, niche lobbying involved. For one, the zinc industry loves the penny. Companies like Jarden Zinc Products (now part of the wider Greer empire) have historically spent significant money lobbying to keep the coin alive. They sell the blanks to the Mint. If the penny dies, so does a huge chunk of their business.
Then there’s the "rounding" fear.
People worry that if we stop making the penny, businesses will just round everything up. If your coffee is $3.02, they’ll charge you $3.05. This is called the "Rounding Tax" theory. However, Robert Whaples, an economics professor at Wake Forest University, did a deep dive into this. He looked at thousands of transactions and found that rounding actually balances out. Some go up, some go down. In the end, it's a wash for the consumer. Plus, rounding only applies to cash transactions. If you’re paying with a card or your phone—which, let's be honest, is what most of us do now—nothing changes. The digital price stays exactly what it is.
Lessons from Our Neighbors
We aren’t the first country to deal with this. In fact, we’re kind of late to the party. Canada got rid of their penny in 2013. They didn't collapse. People didn't start rioting in the streets over four-cent price hikes. They just started rounding cash transactions to the nearest nickel. Australia did it in 1992. New Zealand did it in 1990. They even got rid of their five-cent coins later on!
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The sky is still there. The economies are fine.
The "Nickel" Problem
If we decide to stop making the penny, the next logical target is the nickel. Here’s the dirty little secret: the nickel is also a loser. It costs about 11.5 cents to make a nickel. So, while we’re busy complaining about the penny, the five-cent piece is also draining the treasury.
The U.S. Mint has been experimenting with different alloys to try and lower these costs. They’ve looked at steel, but that messes with vending machines. Vending machines use magnets and weight sensors to verify coins. If you change the metal composition, you have to recalibrate every vending machine, laundromat, and parking meter in the country. It’s a logistical nightmare.
This is why some experts argue we shouldn't just tinker with the metals. We should just stop.
The Sentimental Trap
There's a lot of emotional baggage tied to the penny. It features Abraham Lincoln, arguably our greatest president. People feel like getting rid of the penny is somehow disrespectful to his legacy. But Lincoln is already on the five-dollar bill, and frankly, he’d probably be the first person to tell us to stop wasting millions of dollars on a useless piece of metal. He was a practical guy.
We also have the "Save the Penny" crowd who points to charities. You know those "pennies for patients" jars at school? They raise real money. But charities have already started shifting. Digital "round-up" apps like Acorns or the "donate your change" buttons at grocery store checkouts are way more efficient than hauling 50 pounds of copper-clad zinc to a Coinstar machine that takes a 12% cut anyway.
Environmental Impact of a Dead Coin
Mining zinc and copper isn't exactly "green." We are tearing up the earth to pull out minerals, refining them with massive amounts of energy, trucking them to the Mint, striking them into coins, and then trucking them again to banks... all so they can sit in your couch cushions.
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The carbon footprint of the penny is genuinely absurd when you consider it has no real utility. We are burning fossil fuels to move around something that literally nobody wants to use. When a coin stops circulating—meaning it just sits in a jar—it’s "dead." The Mint has to make more to replace the ones that people are hoarding or throwing away. It's a cycle of waste.
The Inflation Reality
Inflation is the silent killer of the penny. In 1950, a penny could actually buy something. Maybe a piece of gum or a small candy. Today, the purchasing power of a penny is so low that it basically doesn't exist. To have the same "value" as a penny did in 1950, we’d need a coin worth about 12 cents today.
We already got rid of the half-penny back in 1857. At the time it was discontinued, the half-penny had more purchasing power than the modern-day dime. Think about that. We were more "ruthless" with our currency's efficiency in the 1800s than we are now. We've become sentimental about a piece of change that is technically worth less than nothing.
Moving Toward a Penny-Free Future
If the U.S. government finally pulls the trigger and decides to stop making the penny, the transition would be surprisingly boring. Here’s what it would likely look like:
- Cash Rounding: If your total is $10.01 or $10.02, you pay $10.00. If it's $10.03 or $10.04, you pay $10.05.
- Charity Shifts: Charities will move entirely to digital rounding or "nickel drives."
- Military Bases: Interestingly, U.S. overseas military bases have already stopped using pennies. They’ve been rounding for years because shipping tons of pennies across the ocean was too expensive and stupid. If the military can do it, we can too.
- Vending and Tech: Most modern tech won't even notice. Your Apple Pay and Visa cards will still charge you $19.99.
Honestly, the biggest hurdle is just political will. It’s not a "voting" issue for most people, so politicians don’t care. But it should be. It’s a rare example of a government program where cutting it actually saves money and makes everyone's life slightly more convenient.
We've reached the end of the line for the one-cent piece. It served us well for a couple hundred years, but it's time to let it go. We don't need to overthink it. Just stop the presses.
Actionable Steps for the Penny-Weary
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If you're tired of the clutter and want to do your part in phasing out the coin, here are a few things you can do right now:
- Empty the Jars: Take your accumulated pennies to a bank. Many credit unions have free coin machines for members. Don't let that metal sit idle; get it back into the system so the Mint doesn't feel the "need" to make more to replace yours.
- Go Digital: Use contactless payments or cards for small transactions. This avoids the creation of more physical change entirely and keeps your wallet light.
- Donate Smarter: Instead of dropping pennies in a jar, use apps that round up your purchases for charity. It’s more impactful and easier to track for your taxes.
- Contact Your Representative: It sounds cliché, but the penny only exists because of a lack of political pressure. A quick note mentioning the $90 million annual loss can actually help push the needle in D.C.
- Stop Picking Them Up: Seriously. Unless it’s a pre-1982 penny (which is actually mostly copper and worth about 3 cents in melt value), it’s not worth the calories you burn to reach for it. Let them fade away.