Last modified on July 2, 2018. Source: Jeffrey Sparshott, The Penny Cost More to Make Than Its Worth, Again, Dec. 27, 2016, 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. "IRA FAQs - Investments." Despite all the arguments for retiring the penny, the majority of Americans are in favor of keeping it. Along with the zinc, the ores usually contain other metals, including toxic metals like cadmium and lead. 10 Rarest and Most Valuable Coins in the World, Early Jefferson Nickel Values 1938 - 1964. Susan Headley is a well-respected coin collecting expert and writer with over 30 years of hands-on numismatic experience. Why America should get rid of the penny? - Ufoscience.org 10 reasons why we should keep the penny - theflowerfall.com Post date: 20 yesterday. ], [Editors Note: The MLA citation style requires double spacing within entries. Theyre so hard to use that they end up stuffed in jars or abandoned on sidewalks. Should the penny stay in circulation? 1. Most recently, in 2017, SenatorsJohn McCain(R-AZ) andMike Enzi(R-WY) sponsored ultimately failed legislation that would have suspended minting of the penny. [1] Aaron Klein, former Deputy Assistant Secretary for Economic Policy at the Treasury Department, estimates that the United States could see $1.78 billion in losses over the next 30 years if the penny remains in production. "Microcap Stock: A Guide for Investors." There's a downside to life without pennies. In the rare case you have never heard of or used a penny, it is the one cent coin in U.S. Several Chipotle restaurants tried this in 2012, but customers who had extra cents added to their bills complained. Often, when we pay with cash at a store, the total amount doesnt end in a multiple of $0.05. ], ProCon.org, "Should the Penny Stay in Circulation? It too had very little purchasing power at the end of its life. [27], As a result of that extra time per transaction, the average citizen wastes 730 seconds a year (12 minutes) paying with pennies. Nickels cost even more to make - If we eliminate the penny, we will need more nickels in circulation. There has been a growing debate on whether we should keep the penny or let it go. For one thing, consumers benefit from having the penny. For people making over $100,000 those few extra cents don't matter. Shops wouldn't get money from you and you can save up. One-cent pieces account for nearly three-fourths of the coins now Learn all you need to know about United Airlines seat selection - tips and tricks to get the best deal and a comfortable flight every time. In fact, it costs almost a dime to make a nickel today. 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. Whats less clear is why Americans are so committed to a coin with so little monetary value. Rather than drop the practice completely, however, the stores decided to simply round all bills down to the nearest $0.05 instead. It remains to be seen how permanent the new reverse will be, with the fiscal sword of Damocles hanging ominously over the pennys future. That makes them a much more cost-effective way to honor Lincoln than a penny that costs $0.018 to mint. Its the only coin we have that has Lincolns face on it! That doesnt sound like much, but a 2019 Federal Reserve study shows that the average consumer still makes 11 cash transactions each month and according to the Bureau of Labor Statistics, there are over 343 million consumers in the country. [31][32][33], 2. The penny is an essential part of our nation's monetary system, and it helps to keep commerce flowing smoothly. The less a person makes the more the saying "every penny counts" rings true. Authority to discontinue pennies rests with Congress and so far, that august body has been gripped by indecision as it ponders conflicting arguments by lobbying groups on both sides of the issue. List two to three ways. When the Baby Boomers were young, a penny still had some value. It's a Money Loser for You. Ironically, getting rid of it might actually make it more difficult for people to donate money since fewer coins would be available. (This is true for lots of U.S. ,Sitemap,Sitemap, richard sargent obituary new providence nj. https://www.britannica.com/story/pro-and-con-penny. How would removing pennies impact people who primarily rely on cash transactions? This is only the opening salvo in the Great Penny Debate, however. However, it would hit low-income Americans especially hard. Should the US government consider removing other coins from circulation as transactions become more digital? In Canada, at least, eliminating the penny has not led to a widespread increase in prices. OTC Markets. Additionally, cryptocurrency transactions are incredibly fast and secure, making them ideal for day-to-day payments. (Also Nickels. Another piece of evidence against Lombras claims comes from Canada, which stopped minting its penny in 2013. Penny supporters point out that if we get rid of the penny, all-cash transactions will have to be rounded off to the nearest nickel. Illustration: The Spruce /Danie Drankwalter. Finally, small-change drives aren't always enough to raise funds - clean sorting and counting are required before any money can be collected, and many organizations are now accepting donations electronically over coin drives for this reason. 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. Although originally made of pure copper, pennies today are composed of 97.5% zinc and 2.5% copper. "Penny Stock Rules." Removing the penny would save taxpayers money and reduce unnecessary waste. Should We Get Rid of the Penny? - 8 Reasons to Keep It vs Eliminate It To begin with, the Mint itself cant impose such a death penalty. This cost includes the metal content and the labor used to produce them. The impact of the loss of the penny on price flexibility depends on its implementation. Act, which would stop the minting of the penny for ten years to assess the repercussions. But the price of copper receded, and plans for the change were dropped. Since the goal of any business is to make money, most prices would be rounded up, not . It is unclear whether the rounding would be up or down. (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. Why the UK should get rid of 1p and 2p coins - The Conversation If so, how? )," YouTube.com, Sep. 6, 2010, Greg Mankiw, "Get Rid of the Penny!," gregmankiw.blogspot.com, Apr. The United States mint stopped minting pennies for general circulation after 2013 but cash transactions still make up less than 8% of all payments while credit and debit cards, as well as old-fashioned checks are used more often now than ever before according to Trading Economics. Many detractors, tell me what a detractor is, argue that the penny costs more than its face value to . Whaples, by contrast, analyzed actual data from more than 200,000 convenience-store transactions in seven states. Without pennies, the Mint would be forced to make more five-cent pieces. Even automatic toll booths wont take them except in Illinois, the home state of President Abraham Lincoln, whose face adorns the coin. We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. You have it. Let's take a look at the issues involved in the pro-penny and the anti-penny debate so that you can make up your mind about where you stand on this critical matter. At no point did it rise above its historical average of 3.2%. Even so, according to the US Mint, it costs about 2.4 cents to make one penny. Although these arguments aren't based on factual evidence, there is something to be said for keeping the penny around. [29] An estimate from Citizens to Retire the penny says that the 107 billion cash transactions in the United States annually add up to 120 million hours of time between customers and employees at a cost of $2 billion to the US economy. Should we keep the penny. The Daily Iowan. 2022-11-18 This means that taxpayers are losing money every time the mint produces a penny. 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. According to the U.S. Environmental Protection Agency, zinc ores contain only 3% to 11% metallic zinc. And aluminum cents wouldnt be entirely new. It makes no 'cents': Why the United States should do away with the The penny should stay | Silver Chips Online Its giving store owners even more reasons to avoid handling cash as much as possible. But without its namesake coin, many of these penny points saw a significant drop-off in donations - as much as 90%, according to one group that doesn't provide further details. To save time at the register, some businesses have experimented with rounding all transactions to the nearest nickel. All prices would have to be rounded to the nearest nickel. Since the penny costs 0.26 more than face value to THE PENNY DEBATE sample essay.docx - " THE PENNY DEBATE - Course Hero Should we keep the penny Rating: 4,5/10 932 reviews The United States penny, or one-cent coin, has been in circulation for over two centuries and is a longstanding symbol of American currency. Should the Penny Stay in Circulation? - Top 3 Pros and Cons - ProCon.org [1] Thats a bargain for how many times it gets used. In his spare time, Dominic enjoys running along the Hudson River and exploring the citys art galleries. Why We Should Kill the American Penny | PBS NewsHour Second, once pennies drop out of circulation, the nickel will become the lowest-value coin cluttering up peoples pockets. 7 Reasons to Get Rid of the Penny | The Saturday Evening Post We like to give back to our local art community by presenting presidential line of succession 2022 - A fresh look at a contemporary and traditional southwestern art work. 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. "Current Market." Remember to focus on content rather than grammar or mechanics. 10 reasons why we should keep the penny. However, in recent years, there has been much debate about whether or not we . The existence of pennies helps raise a lot of money for charities. NBC's Morgan Radford reports for Weeke. [ 36 ] 6. It would also cause prices to rise. Some Hope Not," nytimes.com, July 29, 2020. However, overall, the Mint is a profit-making machine. Many people thought that 2009, the 100th anniversary of the Lincoln cent, should have been the last year of penny manufacture. Additionally, the United States Mint changed the silver composition and weight of many coins due to the increasing price of silver. "Should the Penny Stay in Circulation? Once the timer stops, you can always click . 9. News sources such as NPR began speculating whether the penny would finally be retired or if crypto possibilities might replace it. A 2006 Coinstar poll found that 33 percent of American men and 22 percent of American women do not value spare change. The group that conducted that survey Americans for Common Cents advocates retention of pennies, but impartial polls have come up with similar results. Would love your thoughts, please comment. In this blog post, we explore the potential of cryptocurrencies to replace the penny. Why we should keep the penny. Accessed April 27, 2023. https://www.procon.org/headlines/should-the-penny-stay-in-circulation-top-3-pros-and-cons/, United States Mint, "United States Mint 2020 Annual Report," usmint.gov, 2021, Brian Milligan, "The Penny Coin: Should We Follow Ireland and Phase It Out?," bbc.com, May 8, 2016, The Harris Poll, "Penny for Your Thoughts? 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. ProCon/Encyclopaedia Britannica, Inc. Should Pennies Be Eliminated Research Paper - 539 Words | Bartleby All rights reserved. She holds a Bachelor of Arts in economics and international studies from Yale University. Those who oppose keeping the penny say it's not likely that we will identify new ways to bring down the cost of manufacturing pennies. Why America Should Get Rid of the Penny - Ontopwiki 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. According to Americans for Common Cents, this will lead to a rounding tax. In other words, stores will deliberately manipulate their prices to ensure transactions are always rounded up instead of down. 25, 2019, Jenny Gross, "Will the Penny Survive Coronavirus? After all, we still need the coin for a number of reasons. The group's mission is to keep the penny in use. This article was published on July 2, 2018, at Britannicas ProCon.org, a nonpartisan issue-information source. Companies would need to update their price catalogs. Crypto possibilities are coming into play as more and more businesses accept digital currencies as payment. Mark Weller is ACC's executive director. [22], At a total per unit cost of 1.82 cents, it costs nearly two pennies to make one penny. Finally, small-change drives arent a cost-effective way for charities to raise funds. News sources such as NPR began speculating whether the penny would finally be retired or if crypto possibilities might replace it. The penny costs an irrational amount of money compared to what it's worth. The debate over whether or not to get rid of the penny has been going on for years. See Details. Benefits of Keeping the Penny | Bizfluent 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. Another significant change in U.S. coinage occurred without any catastrophic effects on commerce. It takes a lot of time for volunteers to pick up, clean, sort, and count all those coins, and the more pennies there are in the mix, the less value the charity gets for each coin it handles. The penny debate gained renewed attention when the coronavirus pandemic led to a nationwide coin shortage as consumers moved towards contactless payment methods. As you can see, both sides have some good points. 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. The very fact that pennies have so little value makes them useful to charities because people are happy to give them away. Despite President Abraham Lincoln's face adorning the single penny, most people don't use or even expect pennies as payment anymore. 4. Should the United States Stop Using Pennies? By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Whaples, by contrast, analyzed actual data from more than 200,000 convenience-store transactions in seven states. However, other arguments are sentimental, having to do with the way people feel about the coin. The penny-pinching . If consumers in 1857 could get along without halfpennies, then modern consumers can almost certainly manage without a coin thats worth less than one-tenth as much. Currently there's no action being taken on the elimination of the penny. 6.9 Reasons Why America Should Get Rid of the Penny - The Balance. I think it human nature to maintain status quo until it becomes a crisis. To access extended pro and con arguments, sources, and discussion questions about whether the penny should stay in circulation, go to ProCon.org. [9]. 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. The first penny, known as the Fugio cent, was reportedly designed by Benjamin Franklin in 1787. Yes, the penny should stay in circulation as it is a reminder of our country's history and serves to keep the cost of goods low. For the first 50 years, the Lincoln cents reverse displayed two sheafs of wheat framing the statement of value. From an economic standpoint, it simply doesn't make sense to continue producing these coins. 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. In 2017 it earned almost $400 million in profits producing circulating coins. A Dozen Money Facts You Should Know | Cheapism.com They are also bf and environment this doesnt make your hands very very very stinky I dont like the smell of metal. The answer, for a variety of reasons, is a resounding "yes.". However, it doesn't say what those reasons are. 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 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. Depository Trust and Clearing Corporation. ProCon.org is the institutional or organization author for all ProCon.org pages. These composition changes ranged from temporary wartime alterations during World War II, to more permanent switches like using zinc instead of copper for the penny. 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. That will save Canadian taxpayers $11 million a year, our northern neighbors government reports. Lombra also argued that this small change in prices would trigger an increase in the Consumer Price Index (CPI). A nonpartisan organization called Citizens for Retiring the Penny, founded by students at Wake Forest University in 2006, supports eliminating it from circulation. 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. Accessed Oct. 21, 2020. For these types of payments, rounding to the nearest nickel would cost consumers an extra 2021 dollars annually. Explain your answer(s). Thus, it couldnt affect government expenditures or trigger widespread inflation. Cryptocurrencies provide users with an alternative form of money that is not controlled by any government or bank, but is instead based on blockchain technology. He argues that there are three main reasons for keeping the penny: Without it, we would become more reliant on the . Low rated: 2. The US Mint produces coins as instructed byCongress, so a law would have to be passed by Congress and signed by the President in order for pennies to be removed from circulation. Perhaps the main issue is that some of the major opponents to getting rid of the penny are the producers of coin blanks and the U.S. zinc lobby -- the groups that profit from the production of the penny. In addition, zinc is toxic in high doses and small amounts can contaminate water and soil in the area surrounding ore roll producing pennies. Should We Make Cents? - CBS News It also says there are many reasons to believe that time spent at the register could actually increase, rather than decrease, if pennies are eliminated. According to Trading Economics, the inflation rate in Canada since the changeover has wavered between a high of around 3% and a low of negative 0.5%. Is It Time To Kill The Penny? : Planet Money : NPR There are notable points that both sides make. Eventually, this reduced demand will result in fewer pennies being minted each year. It was first authorized in 1776 to help fund the Revolution. References to products, offers, and rates from third party sites often change. 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. Why or why not? New Zealand got rid of its penny and two-penny coins without incident back in 1989, and in 1991 replaced their two lowest paper denominations with coins. In response, some penny charities started holding nickel drives instead of penny ones, putting their faith in wishing fountains that accept useless coins. 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. 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. -- who dumped their low-denomination coins 30 years ago, will be laughing at our senseless jingling. A few people groused about it, but commerce continued unabated. Some supporters of the penny point out that its the only coin bearing the image of Abraham Lincoln, probably our nations most revered president. In 1856, the weight was further reduced to 2.49 g. In 1873, the weight was increased to 2.50 g where it remained until silver was eliminated from all coins in 1965. In 2020, the penny debate gained new attention as the coronavirus pandemic led to a nationwide coin shortage. Treasury officials reasoned correctly, it turned out that by then, Americans had developed enough confidence in their government to accept base-metal coins, quite literally, at face value despite their reduced intrinsic value. More recently, a 2017 paper by economist Robert Shapiro estimated that each penny only gets used around twice per year, or 55 times over its lifespan. You can easily get rust off a penny using vinegar and salt. 10 reasons why we should keep the penny. Their reasons differ. Maybe this is another consideration that the U.S. government should look at. According to the Royal Mint, there are 11,430m 1p coins (worth 114.29m) and 6,714 2p . Consequently, all government payments tied to the CPI, such as Social Security, would rise, costing the government $1.5 billion ($3 billion in todays dollars) over five years. Author: www.thebalancemoney.com. Keeping the penny eliminating the penny reflect - Course Hero There have been several other minor changes in the coin metal composition. Not if we want to keep ination in check, protect America's The army don't think we even need the penny because it too heavy to travel. The typical store doesn't even have them available for purchase or give them out in change - they flat-out refuse! View full document. The U.S. Mint reports that it costs nearly 1.6 cents to product one single cent (Grenoble, 2013). It doesnt matter. 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. No, we can't, for some reason. 1. This could potentially have a big impact on charitable organizations that rely heavily on donations from their supporters. The penny's diminishing role means that it may not be here for much longer - so get rid of those spare coins you have tossed around in your pocket! The rust should come right off! The penny has increased to 7.6 million dollars a year to make a penny. Economist Robert Shapiro estimated in a 2017 paper that it costs 55 times more to make pennies than the value of each coin itself. Anti-penny advocates scoff at this argument, pointing out that Lincoln would still remain on the $5 bill, which is actually useful to consumers. Considering all these factors, dispassionate observers might wonder why the powers-that-be in Washington have been dragging their feet for years on killing the cent, especially now that Canada has acted decisively and, it appears, successfully to carry out a similar execution. In 2013 alone, this cost taxpayers $105 million. The United States has eliminated small denomination coins in the past with relatively little trouble. The penny may be worthless, but let's keep it anyway Most Americans want to keep the penny. However, the penny is a very sentimental coin to most Americans, and many people fear that eliminating the penny would raise prices because things would need to be rounded up to thenearest nickel. Rating: 4 (257 reviews) Highest rating: 4. The composition of the coins consisted of an outer shell made out of 75% copper and 25% nickel bonded to a core of pure copper. If more businesses follow Chipotles example and start rounding down their bills, their customers will find themselves with fewer pennies in their pockets. [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. We also share information about your use of our site with our social media, advertising and analytics partners. You don't want to lose it. According to the 2020 Annual Report from the U.S. Mint, it now costs about $0.018 or 1.8 cents to make one cent. For every dollar's worth of coins it shipped out the Mint made 45 . [25] A California company called Mikes Bikes has banned the penny from its registers because Making pennies wastes natural resources [and] is toxic to people and the environment. [26], The use of pennies in paying for goods and making change adds time to sales transactions. The group marshals support from consumers, charities and small businesses who argue that without the penny there will be higher prices due to rounding up costs. For example, the mint made the first dime in 1796 that weighed 2.7 g and had 89.24% silver. At the G-8 summit next week, the Brits and the French -- even the French! They dropped the penny and rounding happens just the way you learned in like 2nd grade. CGAA will not be liable for any losses and/or damages incurred with the use of the information provided. Is My Penny Solid Copper or a Copper-Plated Zinc Cent? Can We All Just Agree That Pennies Are Stupid And Need To Be - HuffPost Some are opposed to change, and others are attached to the penny for sentimental reasons. How Much Does it Really Cost (the Planet) to Make a Penny?