Is It Finally Time to Say Goodbye to the Penny?

The penny has been the one cent coin for more than 220 years. 220 years. It began as a giant 1 inch diameter coin that weighed more than 5 of today's pennies combined. Then again, back in the day, the penny could actually buy something. There are very few things you can get today under a dollar, and I don't think anything can be purchased for a penny. But why? Why can't we use America's most popular coin?
That's a very good question, and it can be answered very simply: the penny is worthless.

Worthless.

Now that isn't completely true. The penny still has some purchasing power, but because of the wonders of inflation, the penny is the least powerful coin ever in the history of America. It's worth 10 times less than the half cent was when it was taken out of production more than 150 years ago.

And on top of all this, it costs the mint (paid for by the government (by you, the taxpayers)) more than two and a half times the value of the coin just to make it.

2.5x the value of a penny?Why would do we keep making them?

Not only do we continue minting these "cent"imental coins, the mints produce them by the billions per year. With more than 300 billion pennies made since they were first introduced, how could we possibly need more? These two parties have plenty to say on this matter.

Citizens to Retire the Penny                vs.                              Americans for Common Cents

Americans for Common Cents vs. the Citizens to Retire the Penny

So these two parties both have their reasons for supporting their sides. Let's compare their views to see who has the better argument.

And for brevity's sake, I'm abbreviating these names to ACC (Americans for Common Cents) and CRP (Citizens to Retire the Penny). (Most of the sources for these arguments can be found at the following webpages: Citizens to Retire the Penny and Americans for Common Cents)

ROUND 1: Do Americans really want to get rid of the penny?

ACC: After a poll taken in 2012, more than two-thirds of adults wanted to keep the penny. Over the years, the majority has always been in favor of keeping the coin to preserve it as well as a couple fears if it was removed (Don't worry, I'll touch on these topics later).

CRP: Well, they've got Obama on their side. Oh, the Department of Defense too! Actually, there haven't been many pennies on overseas bases for the U.S. in the past 30 years because its too expensive and unnecessary to ship out these valueless coins.

WINNER: ACC Americans really like their pennies, what can I say?

ROUND 2: If, if, we were to get rid of the penny, wouldn't rounding cost us more?

I'll let the CRP explain their side first here CRP: Well, getting rid of the penny isn't that much of a crazy idea. Canada got rid of theirs in 2010, New Zealand got rid of theirs decades ago, as well as their nickel, and so did Australia and the UK, and they all now use the rounding system with no real hiccups. Robert Whaples of Wake Forest University even conducted a recent study of more than 200,000 transactions from all walks of life to see if anyone is getting away with an extra couple cents. The truth is, both store and consumer broke even...

ACC: Yes they worry about merchants raising their prices, but given the sales tax, its difficult to pinpoint a way to always make out ahead of the game when it comes to transactions. (Ever think about gas prices? They tack on 9 tenths of a cent... but we pay it anyway) 

The rounding system has been proven to work over decades of testing and implementation and the CRP have the facts to back it up

WINNER: CRP

Rounds 3 and 4

Neck and neck here, lets move into the next round

ROUND 3: Is the time spent handling pennies really wasted?
This is an interesting one... The average person spends 1.2-2.4 hours a year handling pennies.

ACC: Their main argument is that retail workers are not paid according to their productivity and it is crazy to think that cashiers would spend these extra seconds cleaning or restocking shelves. They are also completely against the myth that eliminating the penny would completely eliminate productivity loss.
CRP: ^ You've got a point there. But its not the wasted time that could be made up with other productive activities, its the faster queues and less time taken at each transaction that matters.

Think Black Friday:
It's 5:30am and you just get your [insert big on sale item here] for 50% off.
You head over to the cash registers and see a customer just leave.
Begin to walk over but turn your head and see the massive line of 50 people all waiting to pay.
You spend the next 20-30 minutes waiting for your turn to exchange awkward small talk with a cashier as you wait for your change.
You pocket it and then look back at the end of the day wondering, "how long was I waiting in line for people just getting pennies out of their purse/pocket/wallet/cash register?

The CRP did a nifty little study on this exact time frame and it was between 2 and 2.5 seconds per transaction just for pennies. If you've got 50 people in front of you, thats more than two minutes wasted on pennies in a single day. Just waiting...
WINNER: CRP

ROUND 4: Charity
Most people have seen people collecting change for tons of different causes, but will getting rid of the tiny, plentiful coin really impact contributions.

ACC: In 2009, the Leukemia and Lymphoma Society celebrated collecting its 15 billionth coin. 15 billion... thats 150 million dollars in pennies. I wouldn't even know what to do with that many pennies

Just think, an endless waterfall of pennies...


CRP: Once the pennies have been completely exhausted, charities will begin collecting nickels. This seems like a somewhat ludicrous claim because the U.S. hasn't done anything like this before, but after elimination the penny in other countries, charities have reported collecting almost the same amount of money per year.

WINNER: CRP
Although the Americans for Common Cents reported such a large denomination of pennies, there are still millions more that are collected through checks and large deposits and there has been no change in other countries regarding their donations.

So... What's Happening?

From this little kerfuffle between the leading penny groups, it seems that we have a winner. Americans may not be ready for the fall of the penny, but the time has come to give up the little copper coin. President Obama spoke about discontinuing the penny in a press conference and I believe its only a matter of time.

In my opinion, the main reason Americans want to keep the penny is because it's all we know, and we are scared to see it go. We may not all understand the whole rounding solution, and no matter how many times its explained, theres an age group that will always be against moving forward and dropping the coin.

If the government comes up with a plan and sticks to it, nobody is going to like it at first. Well, this isn't entirely true, according to the polls taken by Coinstar, only 67% will. But as time progresses and the penny phases out, it will become apparent how much faster the transaction process will become and how banks and Federal vaults can streamline their current systems.

(source: http://www.budget.gc.ca...)