" THE PENNY DEBATE" written by Brad Andrews explains to the readers the important points and reasons on why we should keep the penny and important points and reasons as to why we should get rid of the penny. Why or why not? Additionally, the United States Mint changed the silver composition and weight of many coins due to the increasing price of silver. A zinc penny weighs 2.5 g. Doing the math, 327 billion pennies weigh 1.8 billion pounds Those profits result from seigniorage, a positive cash flow that occurs when coins face value exceeds the cost of minting them, rather than the other way around. Remember, pennies cost 2 more than how much their worth, while nickels cost 5 more than the nickel is worth. We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. And since each nickel is worth five times as much as a penny, charities would gather five times as much money with each spare coin tossed into the jar. If you have ten pennies for one reason or another, they will still be accepted and you can use them. Accessed Oct. 21, 2020. "IRA FAQs - Investments." Franklin is also credited with the saying, A penny saved is a penny earned. [35], 3. And aluminum cents wouldnt be entirely new. This could potentially have a big impact on charitable organizations that rely heavily on donations from their supporters. Eliminating pennies would save time at the point of purchase without hurting customers or businesses financially. The composition change also meant that Pennies became lighter; before 1982 they weighed 3.11 grams compared to only 2.5 grams after 1982 and about 2500 grams for one dime (2268 grams). [18] Harvard economist Greg Mankiw stated, The purpose of the monetary system is to facilitate exchange. The penny is an essential part of our nation's monetary system, and it helps to keep commerce flowing smoothly. And nickels cost 10 cents to make. As useless as pennies are, most of us cant avoid them. But others have a vested interest in keeping the penny alive. Americans Oppose Abolishing the Penny," theharrispoll.com, Sep. 22, 2015, US Department of the Treasury, "Resource Center: Denominations," treasury.gov, June 15, 2018, John McCain, "Senators John Mccain & Mike Enzi Reintroduce the Coins Act to Save Billions in Taxpayer Dollars," mccain.senate.gov, Mar. You don't want to lose it. Would love your thoughts, please comment. [12], Organizations such as the Leukemia and Lymphoma Society, the Salvation Army, and the Ronald McDonald House ask people to donate pennies to raise funds. Producing the penny costs taxpayers money: In 2021, each penny produced cost 2.10 cents to make and distribute. There have been several other minor changes in the coin metal composition. Removing the penny removes grades of information that could be available to investors, consumers and manufacturers. Aaron's argument resonates with many modern consumers who remember when a person could buy a mini Tootsie Roll, Mary Jane or ice cream cone at the candy store with just one penny. In 1996, the Government Accountability Office reported that roughly two-thirds of pennies dont circulate at all. 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. However, while many people are calling for the pennys retirement, others are working just as hard to keep the coin in circulation. It too had very little purchasing power at the end of its life. Thus, it couldnt affect government expenditures or trigger widespread inflation. [22], At a total per unit cost of 1.82 cents, it costs nearly two pennies to make one penny. (This is true for lots of U.S. ,Sitemap,Sitemap, richard sargent obituary new providence nj. Susan also belongs to the American Numismatic Society (ANS) and CONECA (error and variety coins club). Dominic Townsend is a successful article author based in New York City. For example, the zinc metals lobby, and the Coinstar company (who make those change-counting machines in the grocery store) will both fight hard to keep the penny in production. Accessed Oct. 21, 2020. When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful. [19] Former US Mint Director Philip Diehl said, [T]he value of a penny has shrunk to the point that, if you earn more than the minimum wage, youre losing money stopping and picking up a penny on the sidewalk. [20], Comedian John Oliver noted, Two percent of Americans admitted to regularly throwing pennies in the garbage, which means the US Mint is spending millions to make garbage. [21] Two-thirds of the billions of pennies produced are never seen in circulation again once they reach a consumer via the bank. ", ProCon.org. That means whenever the Mint produces a penny and sends it out to a bank, its losing money on the deal. (5) The United States should follow the lead of other countries and discontinue the penny, because it is obsolete and costs more than it is worth. However, 59% of adults polled between June 10 and June 16 of 2004 by Harris Interactive said that they . 7 Reasons to Get Rid of the PennyIt's a Money Loser for the Government. Many detractors, tell me what a detractor is, argue that the penny costs more than its face value to . ], [Editors Note: The MLA citation style requires double spacing within entries. On its website, the group marshals an array of arguments that eliminating the penny would lead to disaster for consumers, charities, the government, and the economy as a whole. If that is the case, then people would be less willing to part with spare change for charitable drives. The existence of pennies helps raise a lot of money for charities. And in February 2014, President Barack Obama argued during a YouTube chat that pennies were obsolete and a symbol of U.S. government waste. At no point did it rise above its historical average of 3.2%. Learn how to pay for IVF with these strategies for fertility financing. Many foreign nations have eliminated their most minor denominations with almost no impact on commerce or consumer confidence in the monetary system. Whaples, by contrast, analyzed actual data from more than 200,000 convenience-store transactions in seven states. He argues that there are three main reasons for keeping the penny: Without it, we would become more reliant on the . To begin with, the Mint itself cant impose such a death penalty. As a result, the Mint has to keep making more pennies. The group's mission is to keep the penny in use. The production and use of the penny is no longer cost-effective, so it may make sense to eliminate it as a way to save money and resources. 8 Reasons to Keep It vs Eliminate It," moneycrashers.com (accessed July 2, 2018), Rodney J. Bosco and Kevin M. Davis, "Impact of Eliminating the Penny on the United States Mint's Costs and Profit in Fiscal Year 2011," pennies.org, Apr. And just five years after that, in 1864, the government changed the coins content again this time to bronze, an alloy of copper, tin and zinc and slenderized it further to 3.11 grams, a weight that remained unchanged until 1982. Based on this data, Whaples concluded that after sales taxes and fees, consumers would come out slightly ahead on average with prices rounded off to the nickel. The reason that we should continue the production of pennies is because the citizens of the United States do not deserve more change than is needed. The bills, according to the Federal Reserve, cost only $0.155 to print, far less than their $5 face value. Since the goal of any business is to make money, most prices would be rounded up, not . Should we keep the penny. Making pennies wastes natural resources and is toxic to people and the environment - Pennies are 3 percent copper, and 97 percent zinc and are primarily made from virgin ore. Making pennies from . The typical store doesn't even have them available for purchase or give them out in change - they flat-out refuse! And if a single penny is useless, a whole bunch of pennies isnt much better. Anti-penny advocates point to the 2020 annual report from the U.S. Mint, which states that it costs 1.7 cents to produce a single penny. Economist Henry Aaron of the Brookings Institution, a nonprofit research group, reminisces in a 2013 anti-penny screed about paying a nickel for an ice cream cone as a boy. A HuffPost/YouGov poll conducted in January found that only 34 percent of Americans are in favor of eliminating the penny, while 51 . The very fact that pennies have so little value makes them useful to charities because people are happy to give them away. Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. Or should the U.S. keep it's smallest coin? Despite what the old song says, pennies don't really come from heaven. The reason why is obvious. After 1962, pennies were no longer made of copper or bronze but instead were minted from 97.5% zinc with 2.5% copper coating. This not only weighs down our pockets, but it also holds up the line while we mess around counting out coins. Author: www.thebalancemoney.com. A pro-penny group funded by the zinc industry calls these claims absurd, as they argue employees would save more time spent counting change than people would necessarily spend if we got rid of them. November 29, 2022; did jesus walk on water before or after his resurrection . In 1857, the U.S. Mint stopped making the half-cent coin, partly because the cost of making it had exceeded its face value, and somewhat because it was considered to be too small a denomination and it was no longer needed. This change was likely an attempt to cut costs further as the cost of copper had risen again by this time. 9. However, this only works if the coins actually do circulate and pennies, as noted above, often dont. Want to learn more? Discover what happens, how to avoid it, and what you can do if it's too late. Former Representative Jim Kolbe of Arizona sponsored two bills in Congress to eliminate the penny. The change from brass, the previous composition, took place in 1982 as a cost-cutting measure because zinc was much cheaper than copper. [1] While countries such as Australia, Canada, and New Zealand have phased out their one-cent pieces, Harris Poll found that 55% of Americans are in favor of keeping the penny and 29% want to abolish it. However, it doesn't say what those reasons are. We Have a Precedent for Eliminating Worthless Coins. The primary reason is the soaring cost of metals. The new penny, first issued in 1857 with a Flying Eagle design, was about one-third smaller in diameter than the large cent and less than half the weight. Top 3 Pros and Cons." No. 1943 pennies were made out of a mixture of steel and copper, due to the war effort during World War II. (Source 1) That is 60 million dollars we didn't need to lose, and 60 . Using your figures, that would amount to about 1000 ounces of copper. The current inflation rate is 3.2%, which is below its historical average, so it's unlikely that getting rid of the penny would cause any widespread increase in prices either. Ironically, getting rid of it might actually make it more difficult for people to donate money since fewer coins would be available. Charities rely on penny drives as an easy way to raise funds, and pro-penny groups argue that the elimination of the coin would have a negative impact on charitable donations. Payments made with credit, debit, or old-fashioned checks are still settled down to the cent. According to William Safire, in 1950 a penny would buy what a dime would buy today. -- who dumped their low-denomination coins 30 years ago, will be laughing at our senseless jingling. The elimination of the penny would cause prices to be rounded up to the nearest nickel, which would be a burden on consumers, businesses, and the economy. Citizens to Retire the U.S. Penny cites a study done by Walgreens and the National Association of Convenience Stores showing that handling pennies adds an average of two seconds to each cash transaction. To be fair, the current production cost is down from the 1.66 cents it cost in 2014, and the continuation of a years-long trend and efforts by the Mint to increase efficiency as well as . Among other things, we may receive free products, services, and/or monetary compensation in exchange for featured placement of sponsored products or services. But if we get rid of the penny we would have to stick with the nickel. Economist Greg Mankiw of Harvard University argues that if people start leaving pennies at cash registers due to their lack of purchasing power (in 2020 dollars, 15 pennies would be worth one monetary unit), then maybe then the useless halfpenny will finally be stamped out too. The Salvation Army was one of the first charities to hold drives to collect discontinued pennies when the Canadian government announced it would drop its lowest-value coin, due to its cluttering up peoples' pockets. All information published on this website is provided in good faith and for general use only. The total amount doesn't end when coins and citizens are debating the penny and whether or not it should be kept. Even during my childhood in the 1980s, there was a candy store not far from our house that sold penny candy in jars one penny for a mini Tootsie Roll, or two for a Mary Jane. Not if we want to keep ination in check, protect America's To learn more, read our article on the possible economic impact of eliminating the penny. Those who support getting rid of the penny argue that it is useless, inconvenient and takes up space that could be given to other denominations of currency. Add it all up, and it comes to more than 25 million hours wasted each year. Also the penny is a big part . What Is a Financial Statement Restatement? That adds up to a loss of over $61 million for that year alone. A study by Walgreens and the National Association of Convenience Stores found that pennies add 2 to 2.5 seconds to each cash transaction. Pennies are worth so little now that by taking five seconds to pick one up, youre earning just $7.20 an hour less than the federal minimum wage. The first penny, known as the Fugio cent, was reportedly designed by Benjamin Franklin in 1787. Apr 08, 2023; By ; In nmaa all district teams 2022; camscanner premium account id and password Americans were wary of underweight coins at that time, so the government decreed that all U.S. coins even copper coins must contain enough metal to be worth very nearly as much intrinsically as their monetary face value. They're Bad for the Environment. The penny debate gained renewed attention when the coronavirus pandemic led to a nationwide coin shortage as consumers moved towards contactless payment methods. All prices would have to be rounded to the nearest nickel. Supporters of the penny point to all-cash transactions as a reason why it should remain in circulation. Currently there's no action being taken on the elimination of the penny. In 2009, four different cents were issued with images representing key segments of Lincolns life. If 77.1% of you voted to keep the penny in our 1st poll I bet we can . History has shown us that updating the monetary supply in countries where the currency is very stable has had little if any adverse effect on the economy, or people's acceptance of the coinage. That means the cost of some items would go up. TD Ameritrade. (4) Considering that the penny has virtually no purchasing power, it does nothing except add unnecessary weight to our pockets and purses. The US Mint shipped 8.4 billion pennies for circulation in 2017, more than all nickels (1.3 billion), dimes (2.4 billion), and quarters (1.9 billion) combined. This is only the opening salvo in the Great Penny Debate, however. One of the overlooked reasons why we should keep the penny is that the abolition of the penny would force an increase in the production of the nickel, as more nickels would be necessary to make up for the pennies that are not in circulation. In all, it lost $58 million and the Mint, keep in mind, is a federal agency that traditionally makes money in more ways than one. [10][11] So what if it costs 1.8 cents to make? Theyre so hard to use that they end up stuffed in jars or abandoned on sidewalks. These coins have become highly sought-after collectibles and in 2010 one sold for $1.7 million - a record amount paid for a 1943 copper cent! Overall, continuing the use and manufacturing of pennies . Of course, spending $0.018 to make a coin thats worth only $0.01 isnt necessarily a bad idea because coins are reusable. Will todays cent get the same kind of reprieve? Many people thought that 2009, the 100th anniversary of the Lincoln cent, should have been the last year of penny manufacture. The American Council of Science and Health calculates that just transporting pennies to banks not even counting any of the other stages of their production put about 107 million pounds of carbon dioxide (CO2) into the atmosphere between 1982 and 2016. Despite all this, surveys consistently show that most Americans dont want pennies discontinued. the pennyare affected by higher metal costs. The cost of producing them is higher than face value. In fact, it costs almost a dime to make a nickel today. Some are opposed to change, and others are attached to the penny for sentimental . The answer, for a variety of reasons, is a resounding "yes.". They are good for societies that help with cancer, fundraiser, etc. Mark Weller is ACC's executive director. The mint produces billions of these coins every year. At this rate, the United States loses millions of dollars producing pennies and nickels. There are precedents for getting rid of coins that are too small to use. Vending machines dont accept them, and neither do most parking meters. 6.9 Reasons Why America Should Get Rid of the Penny - The Balance. Halting production of the coin is becoming a more and more popular topic among anti-penny advocates. Its giving store owners even more reasons to avoid handling cash as much as possible. From an economic standpoint, it simply doesn't make sense to continue producing these coins. At the direction of Congress, the Mint has been studying potential new compositions that would make the coin cheaper to produce and save the denomination from the scrap heap. The penny should be abolished because it costs more to produce than it is worth . 25, 2019, Jenny Gross, "Will the Penny Survive Coronavirus? Nickels cost 7.7 cents to make, (2.7 cents over face value, as opposed to 0.26 cents over face value to make a penny,) so making each nickel costs 1.44 cents more than making each penny. 12, 2012, United States Mint, "United States Mint 2015 Annual Report," usmint.gov, June 2016, Associated Press, "US Penny Campaign Benefits Blood Cancer Research," newsday.com, Feb. 10, 2009, University of Southern California, "The USC Penny Harvest Wrapped up Its Third Successful Year," communities.usc.edu (accessed July 2, 2018), Common Cents, "Non-Profits," commoncentsdallas.org (accessed July 2, 2018), Mary Hance, "Penny Drive Sets Record in Raising Money for Second Harvest," tennessean.com, Feb. 17, 2017, Vlogbrothers, "I HATE PENNIES!!!! Despite the cost incurred by the Federal Reserve for minting pennies, many Americans still feel it important enough to honor Lincoln's legacy that they keep the coin bearing his image in circulation. Dominic Townsend is a successful article author based in New York City. Commerce continued without any major hiccups, even though the one-cent copper coin suddenly shrunk from a hefty, over an inch in diameter piece of copper that weighed almost 11 grams, to a penny that was less than half the weight and 40% smaller. Why or why not? At the G-8 summit next week, the Brits and the French -- even the French! In 1959, the 150th anniversary of Lincolns birth, this wheat-ears reverse gave way to a likeness of the Lincoln Memorial. The ubiquitous one-cent coin has been a part of our everyday lives for over two centuries - and some argue that it's time to get rid of it. Read our guide on how to clean pennies. For all its current problems, the penny has a long and proud tradition dating back to 1793, when one-cent pieces were the very first coins produced by the fledgling U.S. Mint. Although these arguments aren't based on factual evidence, there is something to be said for keeping the penny around. The penny no longer serves that purpose. You don't have to be a mathematician or an economist to conclude that it costs nearly two pennies to make one penny. Instead, the coins will be gradually pulled out of circulation. Push for the position and policies you support by writing US national senators and representatives. Read more to learn about the potential benefits of eliminating the penny. She is a member of the American Numismatic Association (ANA) and holds several certifications. Post date: 20 yesterday. The penny is an important part of our history and culture. The main pro-penny lobbying group is Americans for Common Cents, which represents Jarden Zinc, the company that makes the zinc and copper blanks from which pennies are produced. Unlike some other foreign governments, the penny remains legal tender in Canada. Eliminating the penny would mean taking away a significant part of his legacy, which many people consider unacceptable. Some supporters of the penny point out that its the only coin bearing the image of Abraham Lincoln, probably our nations most revered president. Millions of pennies are produced every day and sent out all over the country. Explain your answer(s). If you try paying for something in a store with a fistful of pennies, you can expect dirty looks from both the clerk and the other customers if the store doesnt just flat-out refuse to take them. Despite what the old song says, pennies dont really come from heaven. You can also make some hand-stamped bling like this . NBC's Morgan Radford reports for Weeke. Proper citation depends on your preferred or required style manual. Letting us know his views on keeping or eliminating the penny will help us determine how important or unimportant the penny is for us to keep or not keep. And in 1982, it virtually reversed the percentages of zinc and copper, in the process reducing the weight of the coin to its present 2.5 grams. The Lincoln cent, now more than 100 years old, is by far the longest-running coin in U.S. history. This organization has conducted polls showing that more than two-thirds of Americans favor keeping the penny. However, it could be biased because of the differences between segments of the population that pay electronically and with cash. To access extended pro and con arguments, sources, and discussion questions about whether the penny should stay in circulation, go to ProCon.org. His mission is to use his platform as an author to bring awareness and perspective on important issues affecting everyday life. The debate over whether to keep the penny or discontinue it has intensified since the penny crossed the line of one-cent production cost per penny. The U.S. Mint reports that it costs nearly 1.6 cents to product one single cent (Grenoble, 2013). Management decided that losing a cent or two on most transactions was better than having long lines of customers waiting for change. There are many anti-penny advocates that scoff at its existence, arguing that it costs more to mint pennies than the coins are worth. However, it doesnt say what those reasons are. The alternative to the penny . Here are the proper bibliographic citations for this page according to four style manuals (in alphabetical order): [Editor's Note: The APA citation style requires double spacing within entries. Danielle DeLee began writing in 2010. When the Baby Boomers were young, a penny still had some value. The US Mint shipped 8.4 billionpenniesfor circulation in 2017, more than all nickels (1.3 billion), dimes (2.4 billion), and quarters (1.9 billion) combined. [16] The Ms. Cheap Penny Drive for Second Harvest in Tennessee raised enough to pay for 316,039 meals for the hungry in 2017. The penny was first minted in 1857. That would cost an estimated $10.9 million more annually than it would cost to keep making pennies. To access extended pro and con arguments, sources, and discussion questions about whether the penny should stay in circulation, go to ProCon.org. Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" That will save Canadian taxpayers $11 . Should the US government consider removing other coins from circulation as transactions become more digital? Along with the zinc, the ores usually contain other metals, including toxic metals like cadmium and lead. The government accountability office reported in 2017 that roughly two-thirds of pennies dont circulate, meaning they are sitting in storage and losing their value over time. Since 2006, Jarden has given $1.2 million to Americans for Common Cents (ACC). A dollar coin can last up to forty years. People think we should not make pennies because they cost 2 cents to make. Supporters of the penny dont buy this argument. "FAQs: How Issuers Work with DTC." These arguments arent based on logic which, ironically, makes them much harder to counter. Some Hope Not," nytimes.com, July 29, 2020. Shops wouldn't get money from you and you can save up. In 1943, the Mint produced cents made of zinc-coated steel in order to conserve copper, a metal vitally needed for military uses during that pivotal year at the height of World War II. According to CNN, the Mint has researched the possibility of making pennies from cheaper materials, but it could not find a way to bring the cost of producing them below their face value. Nickels also cost more to make than their face value about $0.07 apiece so the Mint loses even more money on each nickel it produces than it does on each penny. shutterstock.com Around 8% of coppers are thrown in the bin every year. In 2006, New Zealand eliminated the nickel, and while they were at it, they significantly shrunk down the rest of the coins. Managing Editor Although originally made of pure copper, pennies today are composed of 97.5% zinc and 2.5% copper. Their reasons differ. Penny opponents such as Kolbe, Whaples, and Mankiw have all expressed the hope that the pandemic and the resulting coin shortage will finally provide the incentive for Congress to get this virtually worthless coin out of our pockets and our lives. [17], You cant buy anything for a penny; vending machines and parking meters wont accept them. Without pennies to make exact change, prices would have to be rounded up or down to the nearest nickel and skeptical Americans fear that most of the rounding would be up, increasing the cost of much of what they buy. Keeping the Penny. A 2019 poll by Americans for Common Cents found even stronger numbers in favor of pennies, saying 68% of adults want to see the penny remain legal tender. Despite President Abraham Lincoln's face adorning the single penny, most people don't use or even expect pennies as payment anymore. 4. They support keeping the penny because pennies represent the most expendable part of pocket change. While countries such as Australia, Canada, and New Zealand have phased out their one-cent pieces, Harris Poll found that 55% of Americans are in favor of keeping the penny and 29% want to abolish it. Often, when we pay with cash at a store, the total amount doesnt end in a multiple of $0.05. 2023 Money Crashers, LLC. This is because rounding up would make their already tight budget even tighter. The Indian Head cent endured for half a century before its design was replaced by the Lincoln portrait in 1909, the 100th anniversary of the 16th Presidents birth. Consider how you felt about the issue before reading this article. 10 reasons why we should keep the penny. Any action you take based on the information found on cgaa.org is strictly at your discretion. For people making over $100,000 those few extra cents don't matter. They come from mines in the earth zinc mines, mostly, because pennies are more than 97% zinc. The difference between the face value of a coin and and the actual cost to make it is known as seigniorage. ProCon/Encyclopaedia Britannica, Inc. This is why anti-penny advocates argue that its a bad idea to keep making them when the mint loses money doing so, while other coins like nickels cost less to make but have higher value. However, it would hit low-income Americans especially hard. 22, 2006, Philip N. Diehl, "The Real Diehl: Its Time for the United States to Eliminate the One Cent Coin," coinweek.com, Jan. 28, 2015, Last Week Tonight, "Pennies: Last Week Tonight with John Oliver (HBO)," YouTube.com, Nov. 22, 2015, J. William Gadsby, "Future of the Penny: Options for Congressional Consideration," gao.gov, July 16, 1996, Aaron Klein, "Time for Change: Modernizing to the Dollar Coin Saves Taxpayers Billions," dollarcoinalliance.org, July 22, 2013, Michelle Z. Donahue, "How Much Does it Really Cost (the Planet) to Make a Penny?," smithsonianmag.com, May 18, 2016, Josh Bloom, "Want to Help the Environment? ProCon.org is the institutional or organization author for all ProCon.org pages. The COVID-19 pandemic could accelerate this trend. Not only do they cost money to make, but they don't buy much anymore - you can't even buy gum with them! One of the biggest reasons that you should donate is to remove poverty from the world. Pennies are basically worth pennies today, and they consume vast quantities of natural resources to produce. All rights reserved. In response, some penny charities started holding nickel drives instead of penny ones, putting their faith in wishing fountains that accept useless coins. She also maintains a personal blog. One of the functions of prices is to provide participants in the economy with information about the scarcity, supply and demand for a particular good. The 2020 annual report also states that the mint shipped 8 billion coins last year, most of which were nickels and quarters; dimes still put into circulation cost only 6 cents each to make.
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