Here’s something we can all do for our country, and it’s a win-win: Cash in your pennies.
You know — the ones sitting in a jar with stray nickels, dimes and quarters. Or in a piggy bank, if you’re more well-organized.
Merchants are coping with a shortage of pennies for making change, even though the Treasury Department says 114 billion of them are in circulation. The American Banking Association estimates there are about 250 billion.
The problem is that too many pennies aren’t really circulating. They’re accumulating in those jars. According to the Federal Reserve, the average household has $60 to $90 worth of idle coins at home.
An unnecessary shortage
The growing shortage of what should not be a shortage will get worse, because the U.S. Mint has stopped producing pennies.
It was an order from President Trump, who took it upon himself to make yet another decision that should have been left to Congress.
The excuse for no longer minting pennies is that they cost more to make than their face value. A copper-coated zinc penny costs nearly 3.7 cents to make. But it’s one of those “so what?” exercises in irrelevant logic.
The true value of the venerable penny is not that of the metal in it, but of the convenience it provides in commerce and to the respectable minority of Americans without credit or debit cards.
That includes children, whose allowances are paid in cash. For them, there’s no practical alternative to the penny.
A new ’rounding tax’
Many of us are old enough to remember when a penny was worth something at the candy counter. Inflation put an end to that, but the change either has to be paid in part in pennies or rounded to the nearest nickel, as some merchants already are finding it necessary or profitable to do. (Some states prohibit rounding, however.)
The problem is, rounding is inherently inflationary. In July, the Federal Reserve Bank of Richmond estimated it would cost consumers $6 million more a year. It may not seem like much in a population of nearly 327 million, but there’s a principle here: The Trump administration is already doing too much to raise the cost of living. This makes it worse.
“At first glance, the net effect of rounding might appear neutral: Assuming that the final digits of transaction totals are uniformly distributed, the gains from rounding down and losses from rounding up should cancel out,” the bank’s report said. “However, if transaction amounts are skewed toward values that round up, consumers end up consistently paying more, creating what’s referred to as a rounding tax.”
The bank’s paper was based on an extensive Federal Reserve survey in 2023 that tracked what some 4,600 people had actually paid in a three-day period. It found transactions were more likely to end in 3, 4, 8 or 9 cents, which would be rounded up, not down.
To stop minting the penny and to plan for its eventual disuse plays fast and loose with history.
The case for common ‘cents’
The one-cent coin has been minted since 1787. A profile of Abraham Lincoln replaced the Indian Head penny in 1909 to commemorate the 100th anniversary of his birth.
If enough of us put our pennies back in circulation, it will forestall the day when they are no longer legal tender. It also might encourage Congress to override Trump’s ill-considered command.
Many grocery stores have machines that collect and count coins. They take a cut, of course, but it’s worth it to many people who would rather not roll them in paper wrappers, as many banks demand.
There is a small chance that any of your stashed pennies are rare enough to be worth big money. Identifications can be had online from a number of sources. Here’s one site: uscoinsvalue.com. The valuable ones with Lincoln’s head on them generally have a production mishap that may take a magnifying glass to find.
The penny’s inherent value is in its convenience to the public. That should matter more than the relatively modest sums spent to produce it, and so should its history.
The Sun Sentinel Editorial Board consists of Opinion Editor Steve Bousquet, Deputy Opinion Editor Dan Sweeney, editorial writers Pat Beall and Martin Dyckman, and Executive Editor Gretchen Day-Bryant. To contact us, email at letters@sun-sentinel.com.
