Opinion: The end of the penny, a costly coin in a cashless world
As stated on History.com , early pennies, like the Large cent , were made of pure copper and much larger than today's version. In 1857, the Flying Eagle cent introduced a smaller size, followed by the Indian Head cent in 1859.
The most famous penny design, the Lincoln cent , debuted in 1909 to honor Abraham Lincoln's 100th birthday. Originally, it featured wheat stalks on the back, which were replaced by the Lincoln Memorial in 1959. Since 2010, the reverse has shown a shield.
According to History.com , over time, the penny's composition changed from copper to a zinc core with a thin copper coating. Today the penny is 0.75 inches in diameter, 0.0598 inches thick, and made up of 97.5 percent zinc, plated with copper.
In a New York Times article, it was reported that since President Trump took office in January, he has looked for ways to cut down the US debt and made dramatic changes to the economy, jobs, and tariff laws to cut back on spending and increase revenues. On Sunday, January 9th, President Trump directed the U.S. Treasury to stop minting the penny. This left the world wondering why. and, furthermore, does he have authorization to make a call like this?
As quoted in ABC News , Donald Trump believes pennies are a 'waste of our great nation's budget', as he stated on Super Bowl Sunday when he announced that he's ordered his administration to cease production of the 1-cent coin. The issue of pennies has been ongoing for over a decade, with multiple bills being brought to the Senate and Barack Obama expressing his support for eliminating the penny back in his 2013 election speeches.
As inflation has taken effect on most costs of products, coins, especially pennies, have not been exempt from the increase in production costs. T he U.S. Mint reported losing $85.3 million in the 2024 fiscal year that ended in September on the nearly 3.2 billion pennies it produced. As the cost of producing pennies increased from 3.1 cents last year to 3.7 cents this year, it looks like a good time to consider if pennies are even worth producing anymore.
Even with the sentimental value of being the first coin produced that once held lots of buying power, it is now mostly used for collecting or getting lost in the couch cushions. The production of pennies is not just to produce currency into the hands of the Americans, but it actually provides jobs. According to the NPR article , stopping penny production will increase the unemployment rates of zinc manufacturers and mine workers. Manufacturers and miners will be surprised to quickly find themselves on the unemployment line with the millions of other jobs that Trump is cutting to make budget cuts within the economy.
The question is, are we late to the party?
According to History.com , ' In the 1980s, U.S. Military bases overseas abolished the penny and began rounding all transactions up or down to the nearest 5 cents.' As the military bases have run on their own environment and economy, they were foreshadowing change that needed to happen. As well in 2012, Canada discontinued its penny production due to the loss of revenue. Currently, an estimated 86.9% of all transactions in the U.S. were cashless in 2024, according to CapitalOne Shopping Research .
With the elimination of the penny, it must be considered how such a change would affect the economy.
Ultimately, the elimination of penny minting could save the U.S. government money, as the production of pennies currently leads to the loss of millions of dollars annually. For example, in 2023, penny production cost taxpayers over $179 million. According to the Federal Reserve Bank of Richmond , recent studies argue that the impact would likely be neutral when taking sales tax and pricing patterns into account. With concerns of 'rounding tax', where cash transactions will be rounded to the nearest 5 cents, people will be spending a few more cents per transaction. This also opens another problem of the increased reliance on nickels, which are also costly to produce, costing over 7 cents per coin.
Overall, pennies are costing the government and taxpayers more money than they is worth in production. It would benefit the US to look into making cuts to the spending crisis and become a profiting economy again. Related
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