You probably have a jar of them. Or maybe they’re just rolling around in your cup holder, sticky with spilled soda and completely forgotten. We are talking about the copper-plated zinc discs that everyone loves to hate. People have been asking why are they getting rid of pennies for decades, and honestly, the answer is a mix of simple math and annoying politics. It’s not just a rumor anymore; the penny is effectively on life support.
Money is supposed to be a tool. But when a tool costs more to make than it’s actually worth, it becomes a burden. That is the fundamental crisis of the American one-cent piece.
The Brutal Math of the Mint
Let’s get the biggest factor out of the way: the U.S. Mint is losing money on every single penny it stamps. This isn't a small loss. According to the U.S. Mint’s 2023 Annual Report, it costs about 3.07 cents to produce a single one-cent coin.
Think about that for a second.
The government is literally paying three cents to give you one cent. If a private business operated like that, they’d be bankrupt in a week. This "seigniorage" loss—the gap between the face value of money and the cost to produce it—adds up to tens of millions of dollars in losses every year. In 2023 alone, the Mint lost over $90 million just making pennies. Why? Because the price of zinc and copper doesn’t care about our nostalgia. Most of a penny is zinc, and as global commodity prices fluctuate, the cost of minting stays stubbornly high.
Canada Did It, and the Sky Didn't Fall
We aren't the first ones to realize this is a bad deal. In 2013, Canada officially stopped distributing the penny. They didn't just wake up and decide to be difficult; they realized they were spending $11 million a year to manufacture a coin that most people just threw in the trash.
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They moved to a rounding system. If you pay with a card, you still pay the exact cent. $10.02 is $10.02. But if you use cash, the total is rounded to the nearest five cents. It's simple. It works. It hasn't caused hyperinflation or societal collapse. Australia did it back in 1992. New Zealand did it. Even the UK ditched their half-penny decades ago. The U.S. is a bit of an outlier here, clinging to a coin that won't even buy a single piece of "penny candy" anymore.
The Zinc Lobby: The Secret Player
If the math is so bad, why are they getting rid of pennies so slowly in the United States? Well, follow the money.
There is a very real, very active lobbying group called Americans for Common Cents. While their name sounds like a grassroots organization of people who just really love small change, they are largely funded by Jarden Zinc Products. That’s the company that sells the zinc blanks to the U.S. Mint. They have a massive financial incentive to keep the penny alive. Every time a bill comes up in Congress to suspend penny production, lobbyists start talking about how the "rounding tax" will hurt the poor or how the penny is a vital part of American history.
It's a classic case of special interests keeping a zombie currency alive.
The Inflation Problem
The penny’s purchasing power has been obliterated. Back in the early 1900s, a penny actually bought things. Today, it’s a nuisance.
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Economist Robert Whaples has been one of the most vocal advocates for killing the penny. He’s pointed out that the time we waste fumbling for pennies at the cash register actually costs the economy more than the coins themselves are worth. If you spend five seconds looking for a penny and you value your time at even minimum wage, you’ve technically lost money on the transaction. It’s a net negative for human productivity.
Who Actually Benefits from Keeping the Penny?
Not everyone is a "big zinc" lobbyist. Some charities rely heavily on "take a penny, leave a penny" jars or small-change donations. Groups like the Ronald McDonald House have historically raised significant funds through these micro-donations. There is a legitimate fear that if we ditch the coin, people won't donate their nickels or dimes as readily.
Then there’s the psychological factor. We like the number 9. $9.99 feels significantly cheaper than $10.00. This is called "left-digit bias." Retailers love the penny because it allows them to stay just under those psychological price barriers. If the penny disappears, does everything just become $9.95 or $10.00? Retailers aren't sure they want to find out.
What Happens if We Actually Do It?
If the U.S. finally pulls the plug, here is how it would actually look:
- Electronic transactions stay the same. Your Amazon orders and credit card swipes won't change at all.
- Cash rounding. If your total is $1.01 or $1.02, it goes down to $1.00. If it’s $1.03 or $1.04, it goes up to $1.05. Over a lifetime, this statistically balances out to zero.
- The Penny stays legal tender. You could still take your jars to the bank or spend them. The Mint would just stop making new ones.
The Environmental Cost
Most people forget about the environmental impact. Mining zinc and copper is a heavy industrial process. We are digging holes in the ground, refining metal, stamping it, and trucking it all over the country in heavy armored cars—all for a coin that usually ends up under a couch cushion or in a landfill. The carbon footprint of the penny is massive considering it has almost zero utility.
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Why Change is Hard
Politics in D.C. is where good ideas go to wait. To kill the penny, you need an Act of Congress. Most politicians don't want to be the one who "raised prices" (even though that’s a myth) or "killed Abraham Lincoln’s coin." It's a low-priority issue for them, despite the millions of dollars wasted every month.
But the tide is shifting. As we move closer to a cashless society, the physical penny feels more like an artifact than a currency.
Next Steps for Your Spare Change
Instead of waiting for the government to act, you can deal with your penny hoard now.
- Coinstar vs. The Bank: Don't pay the 12% fee at a grocery store kiosk. Most credit unions and some banks have free coin counting machines for members.
- Digital Round-Ups: Use apps like Acorns or your bank’s built-in "round-up" feature. This mimics the penny's function by moving small change into savings or investments automatically.
- Donate the Jar: Many local schools and food banks still run "penny drives." It's the best way to turn that dead weight in your closet into something that actually helps the community.
The penny isn't going to vanish overnight, but the logistical and financial pressure to retire it is becoming impossible to ignore. It's not a matter of "if," but "when."