Why pennies should be banned

Here are seven reasons to put an end to this coin. And because copper had strong market value then, each penny was actually worth 2. In , the copper content of pennies was reduced to just 2. The rest is inexpensive zinc. The penny can buy nothing of value today.

Today, the average hourly wage in the U. The reasons the government has to produce so many new pennies each year is because Americans simply discard them, or use them to fill jars.

The job of counting, sorting, and hauling around pennies represents added expense for cashiers and store managers. Thirty years ago, our defense department prohibited the use of pennies at military bases overseas. The only machines still willing to accept pennies are at toll booths, notably those in the Land of Lincoln.

America began minting half pennies in But by , the half penny had lost so much value, the mint ceased its production. So why does the U. Mint continue turning out pennies? Most Americans have an attachment to the coin and want to see it remain in circulation. They remember collecting pennies as children and that memory lingers. More recently, a paper by economist Robert Shapiro estimated that each penny only gets used around twice per year, or 55 times over its lifespan.

As a result, the Mint has to keep making more pennies. In , the Mint shipped out more pennies than nickels, quarters, and dimes put together — over 8 billion coins. One problem with this argument, according to penny proponents, is that if there were no pennies, the Mint would have to produce more nickels. Many anti-penny advocates think the ideal solution to this problem is to eliminate the nickel as well, making the dime the smallest coin in circulation. Some of the arguments for keeping the penny are practical ones.

For instance, penny supporters claim that eliminating the coin could harm the economy or hamper charities in their fundraising efforts. However, other arguments are sentimental, having to do with the way people feel about the coin.

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. However, it would hit low-income Americans especially hard. The pro-penny group backs up its claim by pointing to the work of economist Raymond Lombra. Whaples, by contrast, analyzed actual data from more than , convenience-store transactions in seven states.

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. Payments made with credit, debit, or old-fashioned checks are still settled down to the cent. At no point did it rise above its historical average of 3. In Canada, at least, eliminating the penny has not led to a widespread increase in prices. Pro-penny groups argue that even if pennies seem worthless, they actually add up to hundreds of millions of dollars in charitable donations each year.

The very fact that pennies have so little value makes them useful to charities because people are happy to give them away. Penny opponents point out several problems with this argument. First of all, if the U. Instead, the coins will be gradually pulled out of circulation.

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. 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.

And as it grows ever easier for charities to accept donations electronically, coin drives are likely to play a diminishing role in fundraising. The current cost for manufacturing a nickel is 7. The mint produces billions of these coins every year.

At this rate, the United States loses millions of dollars producing pennies and nickels. Both sides in the penny debate make some good points, and the solution is far from being an easy decision.

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. The United States has eliminated small denomination coins in the past with relatively little trouble. In , the U. 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.

It too had very little purchasing power at the end of its life. In , the half-cent had the purchasing power that would translate to well over ten cents today, so in some ways, it was akin to our eliminating the dime. Additionally, the United States Mint changed the silver composition and weight of many coins due to the increasing price of silver.

For example, the mint made the first dime in that weighed 2. Less than forty years later, the mint reduced the weight to 2. In , the weight was further reduced to 2. In , the weight was increased to 2. Another significant change in U.

In the U. A few people groused about it, but commerce continued unabated. There have been several other minor changes in the coin metal composition. 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.

More recently, the mint changed the cupro-nickel clad dollar coin the Susan B. Anthony to the "golden dollar" type used in the Sacagawea and Presidential Dollar types.

None of these changes caused any significant problems in commerce. Many foreign nations have eliminated their most minor denominations with almost no impact on commerce or consumer confidence in the monetary system.