Waiting for Change: The Battle Over the U.S. Penny

When was the last time you stopped to pick up a penny? Considering most of us consider the one-cent coin almost worthless these days, it's probably been a while. Still, the U.S. penny persists

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When was the last time you stopped to pick up a penny? Given that its purchasing power has dwindled to nearly nothing over the years, it’s probably been a while. The U.S. penny persists — but how long can it hold on?

On Feb. 4, Canada will begin taking its pennies out of circulation, citing cost (it takes 1.6 cents to mint each one) and diminishing utility. And America’s anti-penny forces are hopeful that actions by our neighbor to the north will spur Washington to eliminate U.S. one-cent coins, each of which costs two cents to mint. Indeed, it gets increasingly difficult to defend a coin that costs us all money every year.

But there are forces fighting for the status quo as well, including the zinc lobby. (Pennies are mostly made of zinc, not copper.) Plus, there’s the fact that without the penny, we’ll become more reliant on the nickel — a coin with it’s own sticky set of issues.

Check out the latest TIME Explains video to get a sense of the U.S. penny’s persistent problems; and this week’s issue of TIME Magazine for the full story, “Waiting for Change.”

154 comments
SarahWarmanen
SarahWarmanen

I'm sure it was just as big a deal when we didn't make half pennies anymore, too.

SarahWarmanen
SarahWarmanen

Sorry, grammar/typo freak here, you used "it's" instead of "its" above in your sentence "a coin with it’s own sticky set of issues." 

"It's" always means "it is".  :)


pithecanthropus4152
pithecanthropus4152

Forgive me  I said this here before, but I do think it was on another comment page. 

  We should have gotten rid of the penny years ago, for one simple reason: When the cheap metals that go into a coin plus the cost of Mint labor and processing cost more than the coin's face value--you don't look for a cheaper way to make it.  YOU STOP MINTING IT!  The mint shouldn't even have to ask for permission; it is supposed to make a profit on the coins it makes.  Instead, though, it's been losing money for years on both pennies and nickels.  

However you may justify the penny's continued existence is irrelevant.   The government and/or the banking system is not under any obligation to provide you with a coin that is worth less than a mouthful of soda or a crumb off the bun of the Big Mac.

BillyThomas
BillyThomas

I remember one time I had $98 in my account and I went across the state line and got $10 worth of gas and used my debit card to pay for it. When I got home I found out I owed the bank $30 and all the money in my account was gone. What happened was I used my debit card to pay for the gas at the pump and they put a $100 charge/hold on my money till the $10 cleared but it bounced my bank account. If i had used cash i would not have had this problem and some gas stations charge ten cents more for a gallon of gas if you use a card at the pump.


BillyThomas
BillyThomas

If we get rid of penny's then next thing you know we will be getting rid of nickels etc till all we will have for money is plastic and all the extra charges that go with using plastic.

Heinz57
Heinz57

So where are all the pennies going to take them out of circulation so that the mint needs to make new ones to replace them? I suppose some simply get lost. Dropped somewhere and never picked up or simply discarded. I suspect most are being "saved in a jar" because they are too inconvenient to carry. So there is this huge reserve of dormant pennies around the country that have fallen out of circulation. Why not tap that reserve and get them back into circulation? Perhaps pay people say $1.10 or $1.25 for every 100 pennies from these penny hoards that they return to the bank. These used pennies therefore would only cost 1.1 cents 1.25 cents to "produce" and get into circulation rather than 2 cents for a new one. It may also motivate people to stop loosing them.

BillyThomas
BillyThomas

@Heinz57 They have what are called Coinstar machines that count change and give you back a receipt. But they charge 8 cents on the dollar for the service.

Heinz57
Heinz57

So Coinstar could PAY the customer 8 cents on the dollar for pennies and pass their 8 cents on to the banks. Still only cost the economy 1.16 cents per penny to produce rather than 2 cents.

GregWiens
GregWiens

Why do American love to hold onto things that loose money and make no economic sense, like bush era tax cuts?

JeffWarino
JeffWarino

In my house we throw our pennies in a jar. Usually. A lot of the pennies generated in our change never get to the jar, end up lost in the car or on the ground. When I'm sweeping i usually don't bother to pick them out of the debris and they end up in the trash. Most of my shopping is done with debit cards, this tracks those pesky pennies more efficiently. The jarred pennies just stay in the jar, as they don't accumulate fast enough to amount to anything, usually a year or two then deposited in my checking account. I see no reason to get rid of the penny, makes better financial sense to make them cheaper and use the debit card more often.

BillyThomas
BillyThomas

@JeffWarino It use to be that every one carried cash on them and as a result they had a pocket full of change. Now days with the use of debit cards a person is hard pressed to come up with a bucks worth of change. So it makes no since to get rid of the penny because their not used unless you pay cash for something. And most people don't want to give up using cash.

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BillyThomas
BillyThomas

So basically a 3% increase in sales tax will increase the total cost of a item by 3%. Depending on how many hands the item pass's through before you buy the item.



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BillyThomas
BillyThomas

 A referendum (also known as a plebiscite or a vote on a ballot question) is a direct vote in which an entire electorate is asked to either accept or reject a particular proposal, usually a piece of legislation which has been passed into law by the local legislative body and was signed by the pertinent executive official(s). This may result in the adoption of a new constitution, a constitutional amendment, a law, the recall of an elected official or simply a specific government policy. It is a form of direct democracy.

BillyThomas
BillyThomas

What this means is some politicians in some bankrupt town or county or state is going to raise your tax’s weather you like it or not.

BillyThomas
BillyThomas

If you let them get their foot in the door to do it.

KarenSaucedo
KarenSaucedo

How can you have a 99 cent sale with no pennies?  That's just SO un-American.  Look, if the Pentagon can pay
$800 for a toilet seat, we can pay 2 cents for a penny, dangit!

gary
gary

To my Canadian friends,o they still mine at the Big Nickel in Sudbury ? Or is that a thing of the past as well ?

FrankRezny
FrankRezny

@gary The Big Nickel Mine was only a demonstration/model of a mine. It was never a working mine for nickel ore.

gary
gary

Used to get two pennies for every glass pop bottle i turned into the corner store. Good way for a kid to make his daily money rather than ask Mom. Now the corner store is gone forever and Walmart is too far away to walk. What's a kid to do ?

BillyThomas
BillyThomas

 In July 2012, San Bernardino became the largest city ever to choose to file for protection under Chapter 9 of the U.S. Bankruptcy code.[6][7] The case was filed on August 1. [8]

sdr984
sdr984

Let's go further, get rid of the second decimal digit and get rid of quarters, nickels and pennies.  Have only dimes and fifty cent pieces for old and/or poor people who don't use credit cards (or other electronic transactions).

BillyThomas
BillyThomas

Right now the town where i live is broke so people are trying to tell me that the town is going to decrease sales tax instead of increase sales tax i think not.

epawar
epawar

So make the darn thing out of plastic.

gary
gary

@epawar Naughty naughty. Plastic degrades the earth mother.

epawar
epawar

@gary @epawar and strip mining for metal doesn't? 

epawar
epawar

@gary @epawar Are you kidding? Have you read half the stuff that comes out over the Internet. Believe me I appreciate a good jest, but wow sometimes you can never tell.

gary
gary

@epawar @gary I was being facetious. Gawd people take everything literally.

gary
gary

So the Govt. loses half a cent on every penny they mint. They lose money on EVERYTHING they touch.

BillyThomas
BillyThomas

What you don't seem to realize is if the sales tax increases 3% then the price of everything you buy will increase 3%.

Drooski
Drooski like.author.displayName 1 Like

@BillyThomas Except the sales tax is not increasing by 3%. Get that through your thick, uneducated head.

partizan
partizan like.author.displayName 1 Like

Eliminating the penny will improve the country.

partizan
partizan like.author.displayName 1 Like

We also should start using $1 coins (more durable) and mass produce the $2 bill.

FrankRezny
FrankRezny

@partizan In Canada, we eliminated the $1 bill a good number of years ago and replaced it with a $1 coin. It is commonly called the Loonie because the standard image is of a Loon (a pointy beaked version of a duck lol).

We had a very commonly used $2 paper bill as well and it too has been replace by a $2 coin. Someone started calling it a Twonie and the name stuck.

As I understand (perhaps it is a myth) the US also had $2 bills at one time but they were very unpopular because buying votes was said to be a common violation of democratic principles. People carrying a $2 bill on election day were thought to have sold their vote for filthy lucre.

Today, of course, corporation pay far more than $2 to buy the votes of representatives.

gary
gary

Could care less whether we do away with the penny but one thing does kinda bother  me. If your change on a purchase would have been  like 3 cents and there is no penny will they adjust prices up or down to make it work ?

Drooski
Drooski

@gary At 3 cents, it would be adjusted up. 0/1/2 = 0, 3/4/5 = 5. Half the time it rounds down, half the time it rounds up. This is what currently happens with pennies.

gary
gary

@Drooski @gary I think they will just price items so you will not need pennies. Not much money on a single purchase but multiply it by the millions of transactions a Walmart has every day. Serious extra profit and no one to blame.

gary
gary

@partizan @gary When Walmart moves into an area other local businesses move into oblivion.

partizan
partizan

@gary @partizan Maybe. A lot of people are complaining about how Wal-Mart is treating their workers. But if Wal-Mart benefits, so do other local businesses. In the end, eliminating the penny saves money because the government is losing money making it.

maxwatch
maxwatch

@gary What can you buy for 3 cents?

gary
gary

@maxwatch @gary That's not what i asked. Who gets to keep what would have been my change ? 

FrankRezny
FrankRezny

@tristelune79 @gary @maxwatch  Another aspect of the Canadian removal of the one cent coin is this. Electronic transactions (credit or debit card, bank transfers and even cheques) will continue to function WITHOUT any rounding. Transactions will be accurate to the penny.

Only CASH transactions will be subject to the round that tristelune elucidated.

tristelune79
tristelune79

@gary @maxwatch I assume it will use the Canadian model if that ever happens so based on the Canadian Mint website about phasing out the penny:

Round down any transaction that end 1, 2, 6 or 7. (i.e, $1.01 & $1.02 become $1.00, while $1.06 & $1.07 become $1.05)

Round up any transaction that end 3, 4, 8 or 9. (i.e. $1.03 and $1.04 become $1.05, while $1.08 and $1.09 become $1.10)

That way, you have 40% of chance of rounding up your transaction, 40% of rounding down your transaction and 20% of not being affected at all.

In order to have 3 cent of change, your transaction would either end with 2 or 7 so you would have pay 2 cent less in your transaction.