Sheila Fitzgerald/Shutterstock.com

A Guide to Ditching the American Penny Once and For All

Will the United States join the brotherhood of nations that finally bid their pennies adieu?

Last week, for the umpteenth time, Americans were called to the altar of reason after a study revealed that it now costs the U.S. Mint 1.6 cents to produce a penny. This was actually good news — last year the penny cost 1.8 cents to produce because of the high price of zinc — but it was yet another call to arms for those hoping to rid the United States of its tiny copper burden.

Would an annual reminder about the waste of tens of millions of dollars invigorate the nation to become pennywise? For reasons that seem to dwell in the same emotional vein as the protests against the downgrading of Pluto just eight short years ago — all previous attempts to abolish the penny, including measures in Congress, have failed. It's more than just nostalgia at play, but a very real old school defiance.

Should you require this line of thought to be Sorkinized, here are Sam Seaborn and Josh Lyman (numbers 11 and 17, respectively, on The Wire's definitive ranking of West Wing characters ) having a rapid chat (c. 2001) about not only the issue of penny abolition, but the inherent zaniness of its advocates:

The Canadian Model

For an example of how America can rid itself of its copper-colored friend, The Wire reached out to Dr. John W. Galbraith, who chairs the Economics Department at McGill University in Montreal. Galbraith's home country stopped producing pennies altogether in 2012.

First, we asked if it's fair to compare the value of the Canadian penny and the American penny. The answer is yes: "In both Canada and the United States, ten cents is now worth what the penny was worth in 1950."

The economist's subtext here is that inflation has made the need for pennies in both countries completely obsolete. Galbraith added that "anything less than the dime" isn't worth keeping around either. As he expressed his wishes to see the Canadian nickel also meet its doom, we immediately pictured partisans from the pro-Jefferson and pro-buffalo camps amassing in a basement somewhere outside of Charlottesville, plotting and sharpening their bayonets with nickels.

He told us that knocking both the penny and the nickel out at the same time would be better, not only because it will eventually be necessary to do both, but also because America would get to one-up Canada along the way.

'An Inelegant Solution'

Galbraith says that while Canada successfully weened itself off of its one-cent piece, the penny, "is still the unit of account in Canada" and the transition "has the air of not being finished."

In other words, in Canada, pennies appear on credit card bills, are still charged on debit card transactions, and still exist in Canadian taxes. Even the pricing in many stores still feature the penny, which has spawned an informal rounding system (and adorable corresponding infographics on the website for the Canadian Mint.)

Because of this, Galbraith calls Canada's ditching of the penny "an inelegant solution," but he also characterized the transition as pretty seamless. There were signs in stores that read "we no longer require pennies" and within a few months the new system was generally understood by everyone.

The reasoning was understood as well: In addition to the costs to government and the environmental toll, the abandonment of the penny aided a country already burdened by "heavy pockets full of change." Poor Canada already uses both one-dollar coins (the loonie) and two-dollar coins (the toonie).

While Americans may not have that specific problem, we asked Galbraith about the nostalgia element — specifically the idea that Americans might be more attached to their Lincoln pennies than Canadians were to theirs. He conceded that the Canadian penny was a little bit easier to extinguish.

The Canadian penny has the Queen on it and a maple leaf. The Queen is on everything and there are lots of maple leafs around so there was little backlash."

The American Penny Abolition Campaign

Dr. Jeff Gore is a professor in MIT's Physics Department, as well as the founder of the advocacy group RetireThePenny.org . Throughout the past dozen or so years, he has served as the face on the obverse side of the anti-coin movement.

The genesis of Gore's opposition has less to do with the value of the coin, its production cost, or its environmental impact than the simple truth that having a bunch of pennies in our daily transactions really holds things up.

What is most important to me is very much the waste of time. I think the value of our time spent handling pennies dwarfs these other costs."

Gore told us about a study he conducted years ago in which he used data from Walgreen's to determine that Americans were individually losing four hours per year (or, by his estimation, $15 billion collectively) in its dealings with pennies.

When we mentioned the Canadian model, he approved, saying that most already round currency to the nearest penny. But he was cool to the idea of ditching the nickel.

There is one complication associated with retiring the nickel, which is that we're left with simply the dime and the quarter. That's problematic because if we're rounding to the nearest ten cents and you buy something for say seventy cents and you give them three quarters then you can't actually get any change back. It leads to some weirdness."

He added that most countries with a ten-cent piece as the small coin often have a twenty-cent piece and a fifty-cent piece as well.

While my mind was blown by this, we had digressed. We wanted to understand exactly why he thought Americans seem so resistant to not just to ditching the penny, but to admitting that it's a problem. His answer was equally elucidating:

"Retiring the penny is a very explicit acknowledgement of the fact that there has been inflation over the years. And it's not that it's been hyperinflation necessarily, but three percent each year for many years. For many people this is painful to acknowledge, this idea that our currency is being less valuable."

He added that reforming the system is acknowledging that something many people don't like has taken place. While places like Canada, Israel, and Australia have scrapped the penny altogether, in other places there is a simple denial that the penny exists at all.

In the Netherlands, for example, they still have penny coins, but simply don't use them. More surprisingly, Gore told us that American military bases also don't use pennies.

"Our military has continued to function okay," he told us. "And any problems that have arisen haven't been caused by a penny shortage."

( Image via Sheila Fitzgerald / Shutterstock.com )

NEXT STORY: So Many Risks, So Little Time

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.