The Price of the Penny


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      The penny has been under debate in the United States for a while now. In fact, there are more downsides to producing the penny. The biggest one being that it costs 2.41 cents to make a penny as of 2016. That is an annual loss of approximately 50 million dollars per year. Also, pennies give limited utility. When you think about it, vending machines don't take pennies and people typically do not pay for things with a handful of pennies. Instead, pennies typically get lost or drop out of circulation. This eventually causes a lack of pennies in circulation which then prompt the government to make even more pennies. Not to mention, as a result of inflation, pennies are literally useless. You cannot buy anything with the penny anymore. People would rather leave their two cents change on the counter than carry it around with them. Pennies also are bad for the environment. It costs money to not only make the penny but also mine the zinc required to make it, power the machines that create pennies and transport pennies. As you can see, the price of pennies is quite high.
      So why keep the penny? A big reason why Americans like the penny has to do with sentiment. People like pennies and they like seeing them in circulation. But pennies also keep prices low. If we ended up eliminating pennies, prices would be rounded off to the nearest nickel and while that might not seem like a lot, the few cents a penny saves you could quickly add up. However, most importantly, pennies help out charities a whole lot. People are usually happy to give away their pennies and as a result, some charities hold penny drives which can sometimes earn up to 150 million dollars in pennies that can be used to aid research for things such as cancer.

So on a final note, do you think we should keep the penny? Is the economic cost too high?


SOURCE:
https://www.moneycrashers.com/get-rid-penny-reasons/
https://www.saturdayeveningpost.com/2018/05/7-reasons-get-rid-penny/

Comments

  1. AnonymousMarch 5, 2019 at 1:45 PM

    Thanks for the post! I don't think we should keep the penny; you made a compelling argument both from an economic and environmental point of view. I wanted to investigate into other coins and found that it cost 8 cents to make a nickel in 2018. I find it interesting the different methods people use to pay each other -- I tend to use cash, but my friends use Venmo and Apple pay. In fact, Venmo has 10 million unique users every month, paying back around $3 million. Over three million of the transactions made in a year were to pay rent. Obviously, the cost of making nickels and pennies is more than their value. This leads me to another question: In the age of increasing use of venmo, apple pay, and credit and debit cards, is paper and coin currency necessary?

    I found the following websites really useful:
    https://money.cnn.com/2018/07/17/technology/venmo-payments-public/
    https://www.washingtonpost.com/news/wonk/wp/2014/12/15/it-cost-1-7-cents-to-make-a-penny-this-year-and-8-cents-to-make-a-nickel/
    http://opencurrency.com/whats-a-penny-worth/

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