Producing a penny costs about 1.7 cents, and the Treasury’s annual penny deficit is about $50 million, according to a New Yorker article by David Owen.
Yet folks — and some companies — still want the penny around, in part because they fear merchants rounding up prices and increased reliance on the even more expensive nickel (which costs almost ten cents to manufacture).
But rounded prices would be virtually imperceptible to today’s customer, Owen argues — especially with a growing number of transactions being handled by non-cash media like PayPal or credit cards, which aren’t subject to rounding.
Owen makes a bold suggestion:
Get rid of nickels as well. (And don’t bother re-basing the penny.)
New Zealand successfully and peacefully axed its five-, one-, and two-cent coins. Canada stopped printing its one- and two-dollar notes (sans mass-protest) and — pointing to New Zealand’s success and minimal inflationary effect — is considering eliminating its one-cent coin.
If not success stories, and 60 Minutes segments, what will persuade Americans to drop the penny?