Few people will stoop to pick up those pennies that are dropped (or thrown) on the ground these days, and there’s a reason: The coins are practically worthless unless you’ve got a ton of them, and almost no one besides a numismatist will argue that point. So why does the government still insist on making them?
The cost of minting each penny, which is now 97.5 percent zinc and only 2.5 percent copper, rose to 2.4 cents last year. Thus the government spends $100 million annually to create what, for most people, is mostly a nuisance. Yes, pennies occasionally come in handy to pay sales taxes, but you can’t actually buy anything — even a gumball — with them anymore. And with increasing numbers of consumers using plastic to pay for their purchases, there’s less need for pennies than ever.
In Canada last week, where the currency is virtually on par with ours, the government took the first step in phasing its penny out of circulation: It minted its last cent. According to a Wall Street Journal story, the country will continue distributing its inventory of remaining pennies for the next few months, while Canadians are encouraged to reduce their own stockpiles by donating them to charity. Then the government will embark on a plan to take the coins out of circulation, melting them down and selling their component metals (4.5 percent copper and 95.5 percent steel). The move will eventually save the Canadian government $11.15 million annually.
We’d like to see the U.S. government follow suit, not just because of the savings but the quality-of-life issue. There’s just no point in pretending that pennies have value, and carrying them around just to round off sales to the nearest nickel — or getting a bunch of them back when paying for something with larger coins — is a pain.
At the very least, to save money the U.S. should alter its penny’s composition, using steel instead of zinc and copper, as was done briefly during World War II. That wouldn’t save a lot, just 0.4 cents per coin, but it would be better than nothing.
Best of all would be to kiss the penny goodbye. Letting retailers round up or down to the nearest nickel wouldn’t be a burden on anyone, or very inflationary: some sales would round up, others down.
Maybe there’s even a way for those cents in the middle to be donated to charity. Then there would be no incentive for anyone to game the system, and the windfall would go to a worthy cause.