US Penny Discontinued and Its Impact

The US penny has been a staple in our currency for over a century, but its fate is uncertain. In 2020, the US Mint produced over 7.3 billion pennies, but their production and circulation have been dwindling in recent years.

The penny's value has been a topic of debate, with some arguing it's too expensive to produce. The cost of producing one penny is about 1.7 cents, making it a significant loss for the government.

The penny's impact on the environment is also a concern, with over 9 billion pennies entering circulation each year. This has led to a significant amount of copper and zinc waste, which can harm the environment if not disposed of properly.

The US Mint has been exploring alternative materials for the penny, such as zinc-coated steel, but nothing has been finalized yet.

The penny has been a topic of discussion for a while now, and one of the main arguments for discontinuing it is its negative seigniorage, meaning its production cost is more than its value. In fact, it costs about two cents to produce a single penny.

The U.S. Mint's annual report estimates that taxpayers lost about $85.4 million from penny production in 2018. This is a significant amount of money that could be better spent elsewhere.

Other countries have already withdrawn low-value denomination coins from circulation, including Canada, Australia, and Switzerland. Canada, for example, stopped producing pennies in 2012.

The cost of producing pennies is not the only issue; it also adds time to cash transactions. A study by Walgreens and the National Association of Convenience stores found that handling pennies adds as much as 2.5 seconds to each cash transaction.

This may not seem like a lot, but when you put it all together, it starts to add up. The anti-penny advocate group Citizens to Retire the Penny claims that handling pennies wastes 120 million hours of time per year in cash transactions with customers and retailers.

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If the penny were discontinued, it would likely continue to be accepted as legal tender. Countries like Canada and Australia still accept pennies as legal tender for transactions.

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Prices would need to be rounded up or down, which could impose an additional sales tax on consumers and drive up inflation. Chipotle tried this at a few of its locations in New York and New Jersey, using a computer algorithm to round receipts up or down to the nearest $0.05.

Eliminating the penny might save time in the checkout line, as a study found that handling pennies adds as much as 2.5 seconds to each cash transaction. This might not seem like much, but it adds up – Citizens to Retire the Penny claims that handling pennies wastes 120 million hours of time per year.

Charities will have to rethink penny drives, a common fundraising activity that relies on people giving away pennies. In Canada, the Salvation Army launched a campaign to provide a place for people to unload their pennies in bulk after the Canadian penny was retired.

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The penny is a relic of the past, and it's high time we consider discontinuing it. In fact, it costs the U.S. Mint a pretty penny to produce, with each penny costing 3.07 cents to make and distribute in 2023.

The penny's value has decreased significantly over the years. In 1913, a penny could buy more than a quarter does today (about 32 cents). This is because the cost of producing the penny has increased, making it a money loser for the Mint.

Producing the penny is also harming the environment. The zinc used in its production can leach into the soil, water, and air, causing health concerns for those living nearby. In 2020, zinc imports added $1.3 million to the $310 billion U.S. trade deficit with China.

Here are some key facts about the penny's production costs and environmental impact:

In addition to its environmental impact, the penny is also a hassle to handle. It takes up time at the cash register to count out, and its value is decreasing due to inflation. In 2023, cash was used for just 16% of in-person transactions, down from 26% in 2019.

The penny has become a relic of the past, and it's time to consider discontinuing it. Here are 9 reasons why:

Producing the penny costs taxpayers money. In 2023, each penny produced cost 3.07 cents to make and distribute, adding up to a total of $127 million for 4.1 billion pennies made that year.

The penny is made of zinc and copper, and zinc can be harmful to the environment and human health. Zinc's mining and industrial use has negative environmental and health impacts, including leaching into the soil, water, and air.

Some of the zinc for penny manufacturing is imported, adding to the U.S. trade deficit. In 2020, zinc imports added $1.3 million to the $310 billion U.S. trade deficit with China.

Pennies are heavy to carry around, weighing 2.5 grams each. A dollar's worth of pennies would weigh 250 grams, or about half a pound, making them a burden to handle.

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Making pennies is a money loser for the U.S. Mint. In 2023, the nation lost $86 million making pennies.

Pennies take up time at the cash register to count out. If time is money, then pennies are not worth the time it takes to handle them.

The use of cash in retail transactions continues to decline. In 2023, cash was used for just 16% of in-person transactions, down from 26% in 2019.

Found pennies aren't worth the effort required to pick them up. At the federal minimum wage of $7.25 an hour, it takes five seconds of work to earn a single cent, making it less than minimum wage to pick up a spare penny found on the ground.

The value of the penny has decreased over time. In 1913, a penny purchased more than a quarter does today (about 32 cents).

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Over 51% of Americans are in favor of keeping the penny, according to a poll by Yougov.com.

Many people have an emotional connection to the penny because of its history, which dates back to 1793 when it was first introduced.

A whopping 71% of Americans pick up pennies they see on the ground, showing that people still value this small coin.

More than half of Americans take their pennies when offered as change, leaving only 39% who leave them in the "give a penny, take a penny" dish offered by some retailers.

The idea of eliminating the penny is met with resistance from Americans who worry about the "rounding tax", which could cost consumers about $600 million per year, according to a study by Pennsylvania State University.

People are also attached to the penny because of its sentimental value, as it's a reminder of their childhood when they first learned about coins.

The Lincoln penny, which debuted in 1909, is a unit of currency that honors Abraham Lincoln, the most popular president, according to a YouGov.com poll.

A lot of people just simply don't want to see the penny go because it holds a special place in their hearts.

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The penny has a rich history in the United States, dating back to 1793 when it first entered circulation as a pure copper coin.

In 1857, the U.S. Mint added nickel to the copper to cut costs, but this change was short-lived as the Mint switched to tin and zinc (bronze) in 1864.

The penny's composition changed significantly during World War II, when it was made of zinc-coated steel in 1943 due to copper's essential role in the war effort.

Forty copper pennies were accidentally produced in 1943, and these rare coins have become highly sought-after collectibles, with one selling for $204,000 in 2019.

Since 1982, the penny has been made with 97.5% zinc and just 2.5% copper, giving it a distinct composition compared to other coins.

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If you're looking for alternatives to the US penny, there are a few options to consider.

The Canadian penny, which was also made of copper, was discontinued in 2013, similar to the US penny.

Some people might consider using digital payment methods, like mobile wallets or credit cards, as a way to avoid carrying coins altogether.

The US nickel, which is still in circulation, is made of a combination of copper and nickel, but it's worth less than a penny.

You could also look into using alternative currencies, like the euro or the British pound, if you travel frequently or conduct business internationally.

The US quarter, another coin still in circulation, is made of a combination of copper and nickel, and it's worth more than a penny.

The U.S. penny is a money loser for the U.S. Mint, despite the organization as a whole being profitable.

A penny costs more to produce than it's worth, which is about half its production cost.

You'd be better off earning minimum wage ($7.25 an hour) than spending time picking up pennies, as the effort required returns less than what you'd earn.

The U.S. Mint contributes hundreds of millions of dollars to the Treasury every year, but the penny is a significant financial burden.

Here are some key statistics on the U.S. penny's worth and production cost:

The effort of picking up pennies just isn't worth it, so it's probably time to let the U.S. penny go.