Today, Explained
Pennies don’t make cents
Oct 11, 2024
Caity Weaver, a staff writer for the New York Times Magazine, dives deep into the curious existence of the penny. She reveals how producing a penny costs more than its face value and why Americans still cling to them despite their dwindling use. The conversation touches on Canada’s successful phase-out of the penny, public reactions to currency reform, and the ongoing debate about its cultural significance in the U.S. - making you question the real value of this small coin.
24:41
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Quick takeaways
- The production cost of a penny exceeds its face value, highlighting the economic inefficiency of maintaining such low-denomination currency in circulation.
- The Canadian experience in eliminating the penny showcases a successful transition to rounding practices, prompting the U.S. to reconsider its outdated reliance on coins.
Deep dives
The Economic Paradox of Pennies
The production cost of each penny exceeds its face value, with the Mint spending 3.07 cents to create one cent. This discrepancy raises questions about the necessity of pennies in circulation. Despite the ongoing production, most of the pennies made do not circulate effectively, as many end up hoarded in jars or lost in cars. As a result, new pennies must be continuously minted to replace those that are not actually being used, resulting in a peculiar cycle of production without practical utility.
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