Pennies: Do they make cents?
Zach Wagner | Collegio Reporter
Ben Leavitt says he wouldn’t miss the penny at all if America got rid of the coin.
“I think all they really do is collect dust,” said Leavitt, sophomore in psychology. “Whenever I find that I have a huge collection of pennies piling up, I’ll usually go to a Coinstar machine and dump it all out there. I definitely don’t think they’re that big of a deal, though.”
Coinstar machines have proven to be useful for Americans looking to clean their purse or wallet of unwanted change since the mid-1990s, and they are seeing action more than ever.
Pennies were not always considered to be worthless, though.
When pennies were first minted from 1909 through the 1950s, you could buy a variety of things with them. A wheat-head penny allowed you to purchase a half-pound of potatoes from a farmers market, vendors sold apples for pennies a piece, and children could buy a small bag of candy with the coin.
However, in the later part of the 20th century, the penny began to lose its worth. For example, newspapers that sold for around 3 cents during the depression increased the price to around 10 cents in the 1970s. Retail stores around the country started selling their goods for more than 5 cents. All of this began to threaten the life of the American penny.
The increased worth of goods in America was the beginning of a slippery slope for the penny. In 2006, the U.S mint stopped making pennies from 100 percent copper, and started making them from 95 percent zinc and 5 percent copper. This resulted in pennies actually costing more to make than they were actually worth. Some people began to melt pennies down in order to collect the copper, and then sold the melted material for a profit. In 2007, pennies were under the gun, so to speak, with the U.S. mint. However, instead of eliminating the penny from American currency, the government outlawed the melting of pennies, possibly removing their predominant use in the 21st century.
Newspapers now cost 50-75 cents, candy costs 10 cents a piece, and produce costs roughly 50 cents an item. In addition, vending machines, parking meters and washing machines do not accept the coin. This raises the question: Is America better off without pennies?
Paul Grimes, dean of the business and economics department, says that Americans may be taking the penny for granted.
“Though they may seem worthless now, their point is to credit the exact worth of an item. If the penny was done away with, everything would be rounded to fifth or tenth cent,” Grimes said. “It would instill just a bit of inflation. Retailers, of course, would increase their prices, rounding up their worth. Americans are very particular about their money, so I think this would cause a bit of an outcry from citizens.”
Kevin Bracker, professor of economics, finance and banking, says that commemorating Abe Lincoln serves as a sort of significance for keeping the penny around.
“There are many factors for the penny, rather than against the piece, that people often overlook when considering its overall worth. A big one being Lincoln’s commemoration with the penny,” Bracker said. “There would have to be some obvious disadvantage for the penny to actually be removed from currency. America just doesn’t work like that.”
It currently costs the U.S mint 1.8 cents to produce a single penny, yet they continue to keep consumer goods at their exact worth. Countries such as France, Italy and Australia have already eliminated the 1-cent piece from their currency. Will America be the next to do so?
“I think that the incentives aren’t enough for the government to make such a change to the system,” Bracker said. “With today’s economy though, anything seems to be possible with the way America’s currency stands.”