The Great Penny Debate: Keep it or get rid of it?
April 1st was not only April Fool’s Day, but it was also National One Cent Day. If you found a penny that day, perhaps it was extra lucky and some establishments had buy one get one for a penny promotions. Other than that one day, a penny isn’t worth much anymore. Of course it has sentimental value; but unfortunately, the penny doesn’t have much buying power in today’s economy.
Below are some quick facts about the American Penny:
• Proper term is one cent piece, but most common name is the penny
• Pence is the British plural of penny when referring to a sum of money, e.g. sixpence = the sum of six pennies
• The Lincoln coin we know today was first introduced in 1909
• Up until the 1980’s, the penny was mostly copper
• Today the coin is mostly composed of zinc, which is cheaper than copper
• According to the U.S. Department of Treasury, it’s the most widely used denomination*
• Particular versions of the penny are highly collectible items
After finding out that the Canadian penny went out of circulation in the fall of 2012 because it costs more to make than it’s worth, I wanted to see if the same issue had ever come up regarding the US penny. I was a bit surprised to find out that it’s quite a hot topic among Americans. During my research, I was even more surprised to learn that many people leaving comments on various websites regarding the penny debate didn’t know some important facts about our country’s history. For example, some people don’t want to get rid of the penny because that would be dishonoring former President Abe Lincoln, not knowing he is also featured on the $5 bill. Another example along the same lines was that some suggested giving Lincoln a memorial somewhere, not knowing there is a very popular Lincoln Memorial in Washington D.C.
As I continued my research, one piece of information in particular was difficult to verify – how much does it cost to mint the penny? I saw prices range from .81 of a cent to 1.23 cents to as high as 3 cents. According to penny related articles on Time Business & Money, Bloomberg Businessweek, and CNN Money, all reputable sources, it cost 2.4 cents to make one penny in 2011. If in fact it costs 2.4 cents to make one penny, then the government is losing 1.4 cents on every penny. Strictly looking at this from a budget perspective, continuing to mint the penny doesn’t appear to be a prosperous economic decision. However, nothing, especially when it comes to congress, is ever that simple. According to ABC News, President Obama proposed an initiative in the 2013 budget for the Treasury Department to reduce the cost of producing pennies by making the composition more cost-effective materials. Perhaps a cheaper-made penny is the solution.
There are countless websites to support each side. According to a poll on Science Buzz, 55% of respondents voted “Yes, they only clutter up my pocket” versus “No way, long live the cent” at 45%. A popular site called Americans for Common Cents is dedicated to educating the masses on the penny’s significance and state that their poll showed 67% of those surveyed are in favor of keeping the penny.
So, which side of the fence are you on in the great penny debate – keep it or get rid of it? Leave us a comment and tell us what you think!
*The U.S. Department of Treasury website page referenced was last updated on 12/5/2010.