The Penny

     The penny, the smallest form of US Currency, represents one cent, or .01 United States Dollar. It is a small coin, being larger than the dime but smaller than the nickel or quarter. Thanks to the penny, any form of change is an option, being able to make any exact amount of money out of bills and coins. The penny has been used since 1793, having a long and extensive history of being a single cent coin. Over the years, it has gone through many changes and variations, coining the iconic look in the year 1909, when the design shifted to featuring Abraham Lincoln. Originally, the penny was made from pure copper, however over time the construction shifted to a zinc core with a copper coating, primarily due to rising metal costs. This has become a rather large issue. At the current rate, it costs around 2.72 cents to produce a single penny, meaning a rather significant net loss on each produced. This has caused much scrutiny from public officials, government officials, and business owners, as well as Americans in general. Many call for the penny to be entirely eliminated and production ceased due to this waste. This is also impacted by the lack of value in the modern day, as many Americans opt to not take change or carry pennies as in the modern day they hold so little value. Businesses also offer complaints, stating they slow down transactions and can halt up registers and other aspects of business, pushing many businesses to consider the penny a nuisance more than anything. Many worry about the elimination of the penny though, assuming most businesses will opt to round prices up rather than down, fearing an increase in inflation. In reality, this is unlikely to happen, as the vast majority of transactions these days are digital, and businesses would likely opt to round the total instead of the individual price items, as the United States most often uses sales taxes rather than embedded taxes, which results in different prices at the register than what is advertised in the store. Either way, there is still a risk of “round-up” price increase. Many countries have already gone away with their one-cent coins, with countries like Canada, New Zealand, and Australia opting to round to the nearest nickel, completely doing away with their one-cent coins. 

     The debate over the penny has many arguments on both sides. On one hand, the penny allows for the use of exact change and has a significant historical significance in U.S. currency. Its production maintains tradition and could prevent issues with rounding that could lead to minor price increases. However, there are substantial drawbacks. The cost to produce each penny exceeds its face value, leading to financial waste. Additionally, pennies slow down transactions and are often discarded due to their very minimal purchasing power. Many other countries have successfully eliminated their lowest-denomination coins, showing that a transition is possible without significant economic disruption. While concerns about inflation exist, the frequent use of digital transactions makes the impact of eliminating the penny less severe. Ultimately, the choice of whether to keep or eliminate the penny weighs tradition against economic efficiency, with  lots of pressure to halt penny production in favor of more practical currency use.