America is constantly searching for smarter ways to manage its economy, and one surprisingly simple idea is gaining attention: retiring the penny. That tiny, copper-colored coin most people leave at the bottom of their bags or cars might actually be draining the nation’s finances. According to experts, getting rid of the penny could save the U.S. nearly $1 billion over a decade. Let’s dig deeper into why so many leaders, economists, and citizens are calling for the end of the penny.
Why Making Pennies Is So Expensive
At first glance, a one-cent coin doesn’t seem like a big deal. But when you look at the numbers, the true cost is shocking. Producing a single penny actually costs about three cents — three times its face value! This includes not just the price of raw materials like zinc and copper, but also manufacturing, labor, transportation, and distribution.
In 2024 alone, the U.S. Mint spent approximately $140 million to produce about 4.6 billion pennies. The result? A net loss of over $95 million.
Here’s a quick look at recent penny production costs:
| Year | Cost to Produce Pennies | Loss Incurred |
|---|---|---|
| 2022 | $108 million | $108 million |
| 2023 | $93 million | $93 million |
| 2024 | $95 million | $95 million (estimated) |
With the rising prices of zinc (which makes up 97.5% of each penny) and copper, these losses are expected to grow even further in the coming years.
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Other Countries Have Already Ditched Small Coins
If America is considering retiring the penny, it’s not alone. Several countries have successfully removed their lowest-value coins without major problems:
| Country | Year Retired | How They Adjusted |
|---|---|---|
| Canada | 2012 | Rounded cash transactions to nearest 5 cents |
| Australia | 1992 | Rounded to nearest 5 cents |
| New Zealand | 1989 | Rounded to nearest 10 cents |
| Finland | 2002 | Rounded prices after Euro introduction |
In these places, shoppers quickly adapted to prices being rounded up or down. Cash transactions became simpler, and most people didn’t even miss the small change.
America Has Phased Out Coins Before
Retiring a coin isn’t something new for the U.S. Over the years, several coins have been discontinued because they no longer made sense economically:
- Half-cent coin (retired 1857)
- Two-cent coin (retired 1873)
- Three-cent coin (retired 1889)
- Twenty-cent coin (retired 1878)
Back when the half-cent was removed, it was actually worth more in purchasing power than today’s dime. Times change, and the value of money shifts — just as it has with the penny.
Why the Penny Is Still Around
You might wonder: if the penny is so costly and outdated, why hasn’t it been retired yet?
The answer lies in lobbying. A company called Artazn, located in Tennessee, produces the zinc “blanks” used to make pennies. Over the years, Artazn has spent millions of dollars lobbying Congress to keep the penny alive.
There’s also a lobbying group called Americans for Common Cents that campaigns to save the penny. But when you dig deeper, you’ll find that this group is largely funded by companies that profit from penny production.
In short, business interests, not public demand, are the main reason the penny still jingles in our pockets.
Common Arguments for Keeping the Penny
Despite the facts, some people strongly oppose retiring the penny. Let’s look at their main arguments — and why they may not hold up.
| Argument | Counterpoint |
|---|---|
| Lincoln is on the penny; it’s historical | Lincoln is already honored on the $5 bill. |
| Removing it hurts charity collections | Most donations have shifted to online and card payments. |
| Prices will rise due to rounding | Studies in Canada show no significant inflation. |
| Cash users will suffer | Only about 18% of U.S. transactions use cash today. |
While emotions and nostalgia are understandable, the financial reality is hard to ignore.
Would Ending the Penny Hurt Collectors?
Some coin collectors might feel sad about the penny’s retirement. However, many experts believe that ending production would actually boost the value of certain rare pennies — especially those minted before 1982, when pennies were made mostly from copper.
Collectors would likely see a new wave of interest in these “historic” coins, making them even more treasured over time.
How Rounding Would Work
Many Americans worry about how businesses would handle prices without the penny. But it’s pretty straightforward:
- Transactions paid by cash would be rounded to the nearest 5 cents.
- Electronic payments (debit, credit, apps) would be charged the exact amount, no rounding needed.
For example:
| Total Bill | Rounded (Cash) | Digital Payment |
|---|---|---|
| $10.02 | $10.00 | $10.02 |
| $10.03 | $10.05 | $10.03 |
| $10.07 | $10.05 | $10.07 |
| $10.08 | $10.10 | $10.08 |
As you can see, the impact is minimal and would average out over time for consumers.
Is It Time to Let Go of the Penny?
In today’s world of digital wallets, Venmo, and tap-to-pay systems, the penny seems more and more like a relic of the past. It costs too much to produce, clutters transactions, and wastes valuable time and resources.
Leading economists, former Mint officials, and bipartisan groups in Congress have voiced strong support for phasing out the penny. The only major obstacle is the powerful lobbying efforts of those who benefit financially from keeping it around.
Saving about $100 million every year — money that could be used for education, infrastructure, or healthcare — sounds like a smart move.
Final Thoughts
The penny once played a crucial role in America’s economy. But today, it’s more of a sentimental habit than a practical necessity. Other countries have proven that life without tiny, low-value coins can be simpler and better.
Retiring the penny could mark a small but meaningful step toward a smarter, more efficient financial system — and save taxpayers billions over time.
Maybe it’s time we all agreed: it’s not about pinching pennies anymore.
It’s about saving dollars.