A few weeks ago President Trump directed the U.S. Mint to stop producing pennies. The Mint produces billions of pennies every year, and in 2024, it cost 3.69 cents to mint one penny. This is being viewed as a cost-saving measure for the government.
The decision to stop making pennies is the correct decision, but it is actually a lot more complicated.
Is there a reason to keep pennies? It has been a long time since these coins were produced for less than their face value. But we save money by using them. A penny might be used thousands, maybe even a million times – it just doesn’t wear out. Pennies are expected to circulate for about 20 to 30 years. Conservatively, the 3.69¢ ÷ 10,000 = 0.000369¢ per transaction, figuring 10,000 uses.
Remember that about twenty years ago the government, as a money-saving measure, was encouraging us to use dollar coins so they could stop producing so many one-dollar bills. It didn’t work. When is the last time anybody but the tooth fairy used a dollar coin?
Why should we get rid of pennies? Because we don’t want them. We don’t want that extra weight in our pockets or purses. We leave them in dishes beside cash registers. We toss them in donation jars or buckets. We might have a bowl in our houses that we drop our coins in. They don’t have enough purchasing power that they are worth carrying around.
The Mint produces around 4.5 billion pennies every year. The government estimates that 288 billion total pennies are available for circulation. However, only about 150 billion pennies are actually still moving through the economic system. I’d guess the rest are sitting around in containers in our houses.
In 1792 Congress created a national mint authorized to make gold, silver, and copper coins, including the one-cent piece known as the penny. The price of these metals has gone up so much that we don’t circulate pure coins any more. Pennies, which used to be pure copper, today are composed of 97.5% zinc and 2.5% copper.
Making pennies has environmental consequences from mining and transportation. Mining zinc and copper produces carbon dioxide emissions and pollutants and uses vast amounts of energy. It’s hard to justify that for a coin no one wants.
If we end the penny, then our government will have to produce more nickels. A lot more nickels. Nickels cost 13.78¢ to produce. That certainly isn’t going to save us money, and no one wants nickels either. Dimes cost 5.76¢, quarters, 14.68¢, so perhaps we should step up their production.
Most of us use apps and cards when we buy things. Cash is useful for small purchases. We would need to keep dimes to be able to give some change. Really the only coin we still use is the quarter because we can put it in machines. Isn’t it time to stop producing the rest?