
The 1 cent coin has now reigned as the smallest denomination of coin for 154 years; well over twice the time of the half cent. Today it carries virtually no purchasing power and amounts to a loss of time in counting coins. Economists speculate that we lose millions of dollars per year in wasted efficiency by carrying and counting pennies. As if this weren’t enough, the cost to create a 1 cent coin is now around 1.79 cents based on the U.S. Mint 2010 report, resulting in a clear 79% loss of taxpayer funds. An even greater capital loss occurs in production of the nickel, which costs 9.2 cents to make, for a hit of 84%. All other coins are minted profitably.
Numerous attempts have been made to end the minting of the penny. In fact, bills were brought to the legislature in 2001 and again in 2006. Neither bill prevailed. The major arguments to keep pennies amounted mostly to issues of tradition and sentiment, while the mathematical argument is a no-brainer. Of course we can’t ignore the fact that a major argument in support of the penny is voiced by the zinc lobby fighting tooth and nail to secure their place in the market.
If economy were the basis of decision we would have good cause to eliminate the penny, the nickel, and the quarter; leaving the dime, half dollar, and dollar coins as the remaining currencies. Transactions would then be rounded to the nearest dime, making them considerably more precise in terms of purchase power than they were in 1857. In this case most retailers will be forced to round down. Since most prices end in $.99 to create a lower price image, retailers would be more apt to use $.90 wherever possible, instead of the weightier $1.00.


One perplexing side effect of the Great Recession is that America has been forced to become leaner in order to adapt and survive. We have spent the last three years seeking out and removing sources of waste. Consequently, as the economy makes a slow recovery U.S. employment has not rebounded despite increasing corporate profits. Businesses are now doing more work with less manpower and less space. The penny pinchers are the survivors. So perhaps you could start cutting waste by emptying your jar full of pennies and nickels. Use that money to buy better light bulbs!