Image Source: Pixabay

A few weeks ago, on the floor of the Senate, Senator Joni Ernst (R-IA) outlined the goals of the DOGE Caucus. She brought up the cost of making both the penny and the nickel. The cost of producing the penny has now soared to three cents, and the production of the nickel costs eleven cents.

The penny is a great example of government waste. Coins are meant to be a simple and efficient medium for the exchange of goods and services. The argument for discontinuing the penny is overwhelming; anyone still supporting its production most likely has not given the subject much thought or is resistant to change.

The waste DOGE is bringing to our attention is backed up by the folks at 'Retire The Penny. Org.' Adding to the argument that the penny should go is the number of hours wasted every year handling pennies or going through several penny-handling-related events. These events include waiting for people to dig through their pockets or purses to find that last cent so they can pay for something with exact change. They probably do this so they don't get stuck with more pennies.

Halting the production of the penny is not a new subject here. Over the years, I have written several articles attacking the idea of producing a coin so low in value that it costs businesses money to handle. It has become very clear that when faced with the increasing costs for handling, storing, and transporting pennies, the coin has become a burden to the economy. The logic of discontinuing production of the penny has massively increased post-Covid, with fewer people using cash amid the inflation we have experienced during the past few years.

As I previously mentioned, currency should be designed by the government as a simple and efficient medium for exchanging goods and services. In March of 2012, Canada decided to do away with its penny coin. Loved by some but an annoyance to many, the coin was withdrawn from circulation because it cost too much to make and had become a pecuniary pest. Ottawa said the penny retained only one-twentieth of its original purchasing power, and discontinuing the penny was expected to save around $11 million a year.

Many other nations have either ceased production or have removed low denomination coins entirely. The list includes Australia, Brazil, Finland, Israel, the Netherlands, New Zealand, Norway, Sweden, Switzerland, Britain, and, as stated above, Canada. By the time it was discontinued, many Canadians considered the penny more of a nuisance than a useful coin.

Today, the cost to produce the American penny blows the Canadian number out of the water. It costs our country billions of dollars, year after year. This amount of waste adds up. Simply put, the American penny doesn't make sense. When weighed and measured, it is lacking. To many people, the penny has become a horrible, little thing with no redeeming value.

The penny is costly to produce, not friendly to the environment, and wastes America’s resources while sapping our productivity. To make matters worse, not only has the government continued to produce the penny, but, over the years, it has even made new versions of the penny. Our government has forgotten that it is not the job of the employees of the treasury to create collectibles, or to pander to small segments of the population by designing coins commemorating or recognizing minor events.

For many years, there have been discussions about discontinuing the penny, which has become virtually obsolete because of its minuscule purchasing value. The penny is a perfect example of our government's inefficiency and waste, and the cost is a burden to be carried by businesses.

Businesses lose profit when paying an employee to count pennies, as the cost of the labor exceeds their value. If an employee is paid $12.00 an hour, they receive twenty cents per minute. As far back as 2018, the “Citizens to Retire the Penny” claimed it cost America one hundred million dollars a year to produce the penny, and more than 15 billion dollars annually is wasted in handling it.

Also, from an environmental standpoint, the penny is a disaster when you consider all the energy used to make, transport, and distribute the coin. There is no doubt the penny is destined for the dustbin of history -- it is only a question of when. Ditching the penny would cost nothing, and with a flourish of the executive pen, the removal of the coin could create huge, annual savings for businesses. However, such a move remains fiercely opposed by metal alloy industries.

This article dovetails with a post from the fall of 2021. It delves into how cash reflects "options for the people," and how it appears that those in charge of such things want it gone. This may be why you have not been hearing about the penny being dropped or a new dollar coin being introduced. Today, it is all about Central Bank digital currencies. These are digital versions of a country’s physical currency issued by central banks.

While Central Bank digital currencies will replace much of the physical currency we use today, the premise of why this is being done deserves to be scrutinized. We should not underestimate the need for coinage and cash in society. Small businesses often rely heavily on small cash transactions. It is the banks, big businesses, and companies like Amazon that flourish when cash is removed. Simply put, in general, the small businesses and retailers on Main Street would be left worse off. 

A few years ago, it was pointed out that if we just got rid of the penny, the U.S. mint would cut its work in half. This figure does not include the time, fuel, expense, and hassle of carting all of those pennies around to the banks, merchants, etc.

Small things matter, if our politicians can’t get this right, how can they ever deal with the more important issues facing our nation? The time to ditch the penny has arrived, so we can focus on more important matters.

More By This Author: