Retiring the Penny

Canada already did it.

Maybe they retired their penny for any of the following reasons:

  • It costs 2.4 cents to mint a penny. In other words, creating the product is an operation functioning at a loss.
  • Average wage in the U.S. is $17 an hour. That means it only takes two seconds to earn one penny. We don't need to transact at that level anymore.
  • Pennies aren't accepted by many machines (i.e. tollbooths, vending machines, etc.).
  • Eliminating the penny would not have an impact on the overall value of cash.
  • The penny is worth less now than ever before in history.
  • It's a hazardous piece of zinc that children can accidentally swallow.

Perhaps we're holding out for the benefits that pennies bring to charities. Who doesn't donate their loose pennies in the open jars at the grocery store? Although even that charity doesn't want to have to deal with a heavy load of metal, every little bit counts - even in the form of pennies.

Give it a few more years. As more people continue to use debit/credit cards more often and digital innovation evolves into a more accepted form of mobile payments, I foresee the end of of the penny.

At least that's my two cents.