Death of the Penny

Over the years, many threads about the death of the cent have come and gone here. I haven't seen one for a while. I'll sum up what I usually say in these threads.

Should the US abolish the cent? Yes, but legislation around how the pricing structure should work without it would need to get passed first. After that, the legislation to order the mint to stop making them would need to get passed. Special interests (zinc, etc.) would probably try to stop it or at least slow it down. In any case, neither of these items appear particularly high on the docket of Congress. When legislation has been presented (an internet search away) it has died in committee.

Also, pocket change, all of it, has become increasingly irrelevant and pretty much all of it exists now merely to make change. Going back far enough, only the half cent once existed purely to make change, but back then the cent, nickel and dime all had decent purchasing power. No more. None of it can really do much anymore except make change. Give a kid a quarter today and you would probably, and justifiably, get a dirty or confused look back. I never gave my (no longer) young nephew anything less than $20. The cent has quickly reached the same status as the Japanese one Yen coin, the one made from aluminum that can float in water. Both have equally null purchasing power. Both should go.

As for the cost to make cents, yes, it does cost more to make a cent than a cent is worth. Same for the nickel. But, as the tour guide at the Denver mint told us, they lose money on these coins, but they more than make up for them with the quarter, so it all comes out as a wash. The Mint tends to make a profit overall. That's likely why, or at least one reason why, obliterating the cent remains low on the priorities of Congress.

So, the economy needs direction on what to do without cents and the mint needs to get told to stop making them. Both require acts of Congress. If it happens anytime soon, I'd honestly be completely shocked.

 

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It was years ago but hey, I could have read it wrong. I've been known to be wrong before and I'm pretty sure this is another one. Thanks for correcting me.

 

"The Federal Reserve orders more 1-cent coins from the U.S. Mint than any other denomination even as data shows that it costs 2.1 cents to make and distribute each one. The over 7.9 billion cents struck last year represents 54.6% of the combined production total for 2021."

The $86.9 million dollar loss the Mint incurs on production of the cent every year is chomp change relative to the US Government's budget. And I am sure a large portion of that loss are allocated fixed/overhead expenditures which would be allocated/absorbed by the production of all other coinage. Which in turn would raise their per unit cost.

The cent is an important monetary unit in facilitating smooth commerce in our country and think the debate over getting rid of such a nominal expense is rather silly.

 

Going to have to disagree here.

The cent is a trivial unit of value at this point. We aren't talking about rounding prices of individual items, where a million 8-cent parts will suddenly cost your company $100,000 instead of $80,000. We're talking about a $31.28 grocery bill being rounded up to $31.30 -- and a $31.27 bill rounding down to $31.25. If you're paying with electronic transfer, check, or card, you'll pay an exact-cents amount, regardless of the total.

If you earn more than $72,000/year in a salaried position with two weeks' paid vacation, your pay is more than one cent per SECOND. How many seconds should you spend counting out pennies for change?

If the one-cent coin cost nothing to produce and distribute, it would still be a drag on our economy.

 

But I will happily 'waste' a second or two to grab a discarded cent.

 

Yep. We can't help the way we were raised. (I do walk past discarded cents now, but that's more because the ground is further away than it used to be, and the knees blocking the way are grumpier.)

 

Well...I'm likely a bit younger than you and my knees don't mind The Bend...for now.