Pandemic revives debate over fate of penny

A nationwide coin shortage caused by the coronavirus pandemic has revived a debate: Is now the time to eliminate the penny?

During lockdowns, consumers have stayed home and avoided emptying their piggy banks of coins in exchange for paper money. Shoppers have also relied on credit and debit cards instead of touching cash.

The shortage has led to renewed discussions about the fate of the penny, which has seen its purchasing power fall because of inflation while its production costs have risen.

Sunde White, a small-business owner in San Francisco, said the coin shortage was one more reason to retire the penny.

“I hate pennies,” said White. “They’re so stupid.”

Given the economic crisis facing the United States, the government could use the money it would save by ending the production of pennies for more important causes, she said. The United States Mint manufactured more than 7 billion pennies in fiscal 2019 at a loss of nearly $70 million.

Each penny costs about 2 cents to produce, according to a 2019 report by the mint. Pennies accounted for 59% of the 12 billion coins the mint manufactured last year.

But the movement to eliminate pennies faces opposition. Some people support the penny for sentimental reasons. It was one of the first coins made by the mint after it was established in 1792.

Another reason, offered by Americans for Common Cents, an advocacy group that provides research for Congress on the value of the penny, is particularly pertinent during a pandemic: Older pennies are made mostly of copper, which is antimicrobial.

Penny proponents also argue that eliminating pennies would amount to a 1-cent sales tax for consumers because prices that end in 99 cents are common.

Robert Whaples, an economics professor at Wake Forest University, said his research showed customers ended up breaking even over time because prices were rounded down as much as up.

“Right now, with the coin shortage, is a good opportunity to seize the issue,” he said.