Every Penny Counts: Facts About the One-Cent Coin

The penny was one of the first coins the U.S. Mint made shortly after its establishment in 1792. Once larger and made of pure copper, the penny has since been downsized to three-quarters of an inch and is now 97.5% zinc and plated with copper.

The penny debate has been going on for decades, with no clear resolution in sight. Here's a closer look at the arguments for and against eliminating the one-cent coin.

The main argument against the penny is that it costs more to make than its value. A 2024 U.S. Mint report says the unit cost for the one-cent coin is more than 3.69 cents and has exceeded its face value for 19 years. And according to a 2014 U.S. Mint report: “There are no alternative metal compositions that reduce the manufacturing unit cost of the penny below its face value.”

Producing pennies also takes a toll on the environment due to the carbon dioxide emissions, pollutants, and energy use associated with mining the ores to make the coins.

But even costs aside, Harvard economist N. Gregory Mankiw argued against the one-cent coin on the basis of its lack of everyday utility, writing in a 2006 Wall Street Journal editorial: “The purpose of the monetary system is to facilitate exchange, but I have to acknowledge that the penny no longer serves that purpose. When people start leaving a monetary unit at the cash register for the next customer, the unit is too small to be useful. I know that some people will be upset when their favorite aphorisms become anachronistic, but a nickel saved is also a nickel earned.”

Indeed, according to the Federal Reserve, the purchasing power of a penny declined more than 30-fold between 1900 and 2022. In 2015, former U.S. Mint Director Philip N. Diehl wrote, “Today, the value of a penny has shrunk to the point that, if you earn more than the minimum wage, you’re losing money stopping and picking up a penny on the sidewalk.”

Not everyone is on board with pinching the penny. Mark Weller, executive director of the pro-penny group Americans for Common Cents (ACC), responded to DOGE on Jan. 23, asserting that the government “won’t save money if the penny is eliminated” and that such a move would instead “have a massive negative impact on the US Mint’s cost structure.” The group argues that eliminating the penny would require producing more nickels to “fill the gap in small-value transactions.” But nickels suffer from a similar “seigniorage” problem: the 2024 U.S. Mint report said the five-cent coins have a unit cost of 13.78 cents each.

ACC also points to polling that shows Americans generally favor keeping the penny in circulation. (Other polls, however, say otherwise). And even the anti-penny comedian John Oliver can’t deny the sentimental value of chucking a penny into a fountain to make a wish or spitefully paying someone in a stash of one-cent coins.

Other arguments against the elimination of the penny come from economists who say that eliminating the one-cent coin would have disproportionate impacts on the poor. Retired Pennsylvania State University Prof. Raymond Lombra, a former senior staff economist at the Federal Reserve Board, has argued that a resultant “rounding tax” on consumers who use cash would be regressive because the poor tend to use cash more. An economics student in Canada, which stopped minting one-cent coins in