You probably have a jar of them. Maybe a drawer. Or they're rolling around in the cup holder of your car, sticky with spilled soda and effectively useless. It's a weird phenomenon when you think about it. We have a form of legal tender that people literally see on the sidewalk and decide isn't worth the effort of bending over. This brings up a question that resurfaces every time inflation spikes: are pennies going extinct or are we just stuck with them forever?
Honestly, the situation is kind of ridiculous.
The United States Mint is currently spending about three cents to manufacture a single penny. You don't need to be a Wall Street math whiz to see the problem there. We are mass-producing an item that loses 200% of its value the second it hits the conveyor belt. Yet, here we are in 2026, and the copper-plated zinc discs are still clinking in our pockets.
The Massive Cost of Staying Small
The math is brutal. According to the U.S. Mint's 2023 Annual Report, the cost to produce and distribute the cent was 3.07 cents. It's actually gotten worse over the last decade. Back in 2010, it cost about 1.79 cents. As the price of zinc and copper fluctuates and labor costs rise, the "seigniorage"—which is just a fancy word for the profit a government makes by issuing currency—has gone deep into the red. We're talking about a loss of over $90 million a year just to keep the penny in circulation.
Why?
It's not just the metal. It's the shipping. Pennies are heavy. Moving billions of them from mints in Philadelphia and Denver to banks across the country requires a massive amount of fuel and logistics. If you’ve ever tried to carry a $25 box of pennies, you know they’re essentially dead weight.
Why Haven't We Killed It Yet?
You’d think "losing millions of dollars" would be enough for Congress to act. But the penny has some surprisingly powerful friends.
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First, there’s the zinc lobby. Most people think pennies are copper. They aren't. They’re 97.5% zinc with a thin copper coating. Companies like Jarden Zinc Products (now part of Oneida Group) have spent significant money over the years lobbying to keep the penny alive. It’s a guaranteed government contract. If the penny dies, a massive chunk of their business goes with it.
Then there’s the "Rounding Tax" fear. This is the big one for consumers. People worry that if we stop using pennies, businesses will round every price up to the nearest nickel. If your coffee is $3.92, it becomes $3.95. Over a year, that adds up, right?
Well, maybe not.
The Canada Experiment
We don't have to guess about this. Canada killed their penny in 2013. They didn't just stop making them; they pulled them from circulation. The results were... fine. Seriously. Nothing broke. Businesses started rounding cash transactions to the nearest five cents, while digital payments (credit, debit, Apple Pay) stayed exact to the cent.
Dr. Robert Whaples, an economics professor at Wake Forest University, has been a vocal advocate for retiring the penny for years. He argues that the time we waste fumbling for pennies at cash registers costs the economy more than the rounding ever would. Think about it. If every American wastes just 30 seconds a month dealing with pennies, that’s millions of hours of human life evaporated into the void for no reason.
The Inflation Factor
Inflation is the silent killer of the penny. In the 1950s, a penny actually bought things. You could get a piece of gum or a small candy. Today, the purchasing power of a penny is so low that it basically doesn't exist. If you adjust for inflation, a penny today is worth less than a hay-penny (half-cent) was when that coin was discontinued in 1857.
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The U.S. government realized back then that the half-cent was useless. We’ve reached that point with the penny, and arguably the nickel too. A nickel now costs about 11 cents to make. We're essentially subsidizing a hobby of carrying around heavy metal circles.
Are Pennies Going Extinct in the Digital Age?
The rise of a cashless society is doing what Congress won't. Venmo, Zelle, and tap-to-pay have made the physical penny irrelevant for a huge portion of the population. When was the last time you actually used a penny to buy something? Most people just dump them into those Coinstar machines—which, ironically, take an 11.9% cut, further proving that the penny is a losing game.
But we have to look at the unbanked.
A significant portion of the American population relies entirely on cash. For these individuals, every cent matters. Advocacy groups often argue that removing the penny would disproportionately affect low-income earners who don't have the luxury of digital rounding. It’s a valid concern, though the Canadian model suggests that rounding "wins" and "losses" usually even out over the course of a month.
The Sentimental Stranglehold
Don't underestimate the power of Abraham Lincoln. The penny was the first coin to feature a historical figure (starting in 1909 for Lincoln's 100th birthday). Before that, we used Lady Liberty. Americans are weirdly attached to the image of Lincoln on that tiny coin. There’s a certain nostalgia there that politicians are terrified to touch.
Whenever a bill is introduced to "suspend" the penny—like the COINS Act—it usually dies in committee. No one wants to be the politician who "killed Lincoln" or "raised prices on the poor." It's a political landmine with very little upside for the person stepping on it.
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What Happens if the Penny Actually Dies?
If the U.S. finally decides that pennies going extinct is a necessary move, here is what the transition would realistically look like based on other countries:
- Production Stops: The Mint stops striking new coins. This saves $90M+ instantly.
- The Cash Rounding Rule: Cash totals would be rounded to the nearest $0.05. $1.01 and $1.02 round down to $1.00. $1.03 and $1.04 round up to $1.05.
- Digital Stays Precise: Your credit card bill would still say $19.99. No change there.
- Charity Impact: Many charities (like the Ronald McDonald House) rely on penny jars. They would likely see a dip in physical donations but a shift toward "round up" apps.
It’s worth noting that the military has already done this. U.S. overseas military bases have been "penny-free" for years because shipping the coins across oceans was even more expensive than shipping them to Kansas. They use the rounding system at their exchanges, and the world hasn't ended.
The Reality Check
So, are they going extinct?
Technically, no. Not yet. There are an estimated 240 billion pennies currently circulating in the U.S. economy. Even if we stopped making them tomorrow, they would be popping up in couch cushions for the next fifty years. But as a functional tool for commerce, the penny is already on life support.
We are in a weird limbo. We're paying for a product that no one wants, to solve a problem that doesn't exist, because we're afraid of a change that has already worked in almost every other developed nation.
Actionable Insights for the "Penny-Pocalypse"
Since the penny isn't officially dead but is definitely dying, here is how you should handle the situation:
- Stop Hoarding: If you have a massive jar of pennies, you're literally letting inflation eat your (small) pile of money. Take them to a bank. Some banks will take them for free if you're a member, saving you the Coinstar fee.
- Watch the Zinc Market: If you're a nerd for commodities, keep an eye on zinc prices. If they spike again, the cost to make a penny will hit 4 or 5 cents, which might finally force the Treasury's hand.
- Support Digital "Round-Up" Savings: Since we don't have a physical way to save "spare change" easily anymore, apps that round up your purchases to the nearest dollar are the modern equivalent of the penny jar.
- Check for Rarities: Before you dump that jar, look for 1943 steel pennies or the "double die" 1955 or 1972 versions. Most pennies are worth exactly one cent (or less, if you count the cost to carry them), but a few are worth thousands.
- Prepare for the Nickel: Once the penny goes, the nickel is next on the chopping block. It’s the next logical step in an economy where the smallest unit of currency continues to lose its meaning.
The penny's extinction isn't a matter of "if," it's a matter of "when the government gets tired of losing money." Until then, keep checking your pockets. Or don't. Honestly, it probably isn't worth your time.