The problem with pennies

The+problem+with+pennies

Pennies cost so much that it makes no cents. I believe this, not because I almost choked on one in elementary school, but because it costs more to make one than its worth. According to the 2015 United States Mint Annual Report, a penny costs 1.4 cents to produce. This is a result of inflation of the materials used to make the penny, specifically Zinc.

According to the US Mint’s 2006 Annual Report, the cost of the penny and the nickel rose above their face values in 2006 because of the increased cost of zinc and copper. Since then, the cost to produce pennies and nickels has remained above their face values. There was a lot of hope that we could fix the penny’s cost of production.

However, the US Mint’s 2014 Biennial Report concluded that it would be impossible for them to create a penny that is cost-effective.

“There are no alternative metal compositions that reduce the manufacturing unit cost of the penny below its face value,” said the Mint in the report.

The penny can be instrumental to an everyday American, so it’s understandable for people to think that not having a penny would be bad for the United States. Without a penny, the $0.99 concept used by companies all over the country in order to make their product seem cheaper than it is would no longer  be a valuable marketing tool for retailers. However, Canada got rid of their penny and they made it work.

The Canadian penny cost 1.6 cents to produce and the government saw an opportunity to fix their problem. In 2012, Canada began phasing the penny out of continuation and in 2013 they stopped its distribution. Canada’s crazy solution to their lack of a penny; rounding. $1.01 and $1.02 round down to $1.00, and $1.03 and $1.04 round up to $1.05. Rounding isn’t advanced math, so most people were able to work with this change. The negatives of using math when spending your money outweigh the amount of money the U.S. will save every year.  

Canada saved a lot of money from getting rid of their penny. An article from CNN reported that the Canadian government saved $11 million with the elimination of their penny. $11 million can’t be understated. America could use the money they save on funding roads and other resources that every American needs.

Getting rid of the penny isn’t something that needs to be done immediately, but the amount of money the U.S. government has wasted since 2006 is silly. If we get rid of the penny we can cut down on wasted money and worry about more important matters like highway management and funding schools in rougher neighborhoods.