Is Eliminating The Penny Equitable? Its Cost Taxpayers $250,000,000 Over The Past Two

Is a penny saved still a penny earned if there is no penny?

This Saturday, President Donald Trump announced that he’d instructed Treasury Secretary Scott Bessent to halt the production of the U.S. pennies, citing the high cost of producing the one-cent coins.

“For far too long the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful! I have instructed my Secretary of the U.S. Treasury to stop producing new pennies. Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” President Trump said.

According to the U.S. Mint in its 2023 Annual Report, around 4.1 billion pennies were circulated, costing the American taxpayers over $179 million. In its 2024 Annual Report, the U.S. Mint estimated that the cost had risen more than 20% year over year because of the rising cost of zinc and copper, which are used to make the coin. Even though they produced less, it still cost taxpayers $85 million.

The current cost? Approximately 3.7 cents to produce and distribute each penny.

If adjusted for both inflation and economic growth, a penny in 1940, compared to our relative income today, is as 66 cents.

The good news, I suppose, is that my thoughts are now worth 66 cents.

But is eliminating the penny equitable for those who don’t have money and for the everyday consumer?

The Penny Has Long Been On The Chopping Block

U.S. penny production began in 1787, and the coin was originally made of copper. It has been the lowest face-value physical unit of U.S. currency since the abolition of the half cent in 1857. During the early 1970s, the price of copper rose to the point where the penny contained almost one cent’s worth of copper. This led the Mint to test alternative metals. Today, the penny is made from copper-plated zinc, a touch of copper and other materials, but the costs have still increased slowly over the years, leading to a debate over whether we should even keep the penny in circulation.

In the late 1980s, Arizona Congressman Jim Kolbe (R) started his quest to try to kill the penny. By the 1990s, Kolbe introduced new legislation to kill the penny in every new session of Congress. At the time, most saw it as nothing more than a rounding tax, with all the $9.99 products increasing to $10.00. In 2017, late Senator John McCain, R-Ariz., cosponsored a bill that would have paused penny production for 10 years.

A decade earlier, Wake Forest University economist Robert Whaples, who researches the penny, had conducted a study in 2007 and found that the final digit of purchases—which usually involves multiple products and sales tax—was pretty much random. Additionally, eliminating the penny would not only have a negligible impact on inflation, costs and profits but also save time for customers and clerks, which could recoup about $730 million per year.

Even with these purported benefits, there wasn’t enough momentum to implement the proposed changes.

Enter Canada…

In 2013, Canada took steps to became penniless.

The key to the transition was using simple rounding rules, which would only apply to cash transactions, leaving electronic payments with credit or debit as is. Online retailers wouldn’t experience any changes at all. Cash-accepting retailers could select from a few different rules, as long as they were consistent:

• Round down all transactions to the nearest nickel.
• Round down all sales below five cents and round up all sales above five cents.
• Use the pennies in circulation, or use the penny-by-penny rule digitally

Over time, Canada has proven that the lack of a one-cent coin hasn’t changed prices.

Other countries, including Norway, New Zealand, Finland, Australia and the Netherlands also have transitioned to a penny-free state.

Is Keeping The Penny Equitable?

In 2022, the president nominated the Honorable Ventris C. Gibson, a Navy veteran, as the 40th director of the U.S. Mint. She is the first African American to lead the bureau, which is the largest mint in the world.

A signed statement from her included in the Mint’s 2023 Annual Report addressed the importance of equity at the mint:

“In reshaping our culture into one that eliminates favoritism, elevates belonging, eradicates inequities, and welcomes a diverse range of perspectives, as promised, I created the Office of Equity and Inclusion, which is responsible for setting, implementing, executing and optimizing the overarching strategy and initiatives that address and support diversity, equity, inclusion and accessibility (DEIA).”

In a nation where the total homeless population rose 12.1% from 2022 to 2023, with one in every 500 Americans was experiencing homelessness, how does eliminating the penny factor into the pursuit of equity?

According to the Federal Reserve, only 7% of U.S. transactions are made with cash, so the group that doesn’t have access to credit or digital platforms will be the ones who are affected. Based on the wealth inequality in America today, I’m not sure the penny should be driving conversations regarding what’s equitable. But the opportunity to save $250,000,000 over a two-year period—money that could be allocated to more pressing needs—is a start, right?

As the government and this administration continue to adjust policy and procedures, the question we should ask is: Where will the saved money be reallocated?

If the funds are reallocated to those who need it most, eliminating the penny would serve us well—making this change a penny-wise decision on the road to a more equitable economy.