Why Do We Ignore Pennies?

Credits to Tracy Maylett, Hoang Nguyen

The U.S. penny is so disrespected nowadays. Just 100 years ago, a cent could buy you a copy of the New York Tribune. In 1964, 170,000 GM employees went on strike over a demand for a one cent raise. Meanwhile, when we see a penny on the ground today, we don’t even bat an eye and continue walking. That poor poor penny is being shown no love anymore…

The value of one cent has greatly decreased due to inflation. According to the Bureau of Labor Statistics consumer price index, today’s prices in 2020 are 2,969.01% higher than average prices since 1900 and the prices for goods and services have increased by an average of 3.24% since 1914. Just to put all these statistics into perspective; picking up 31 pennies today is equivalent to picking up 1 penny in 1900.

On paper, it’s actually not financially worth your time to pick up that penny that you found on the street. With the federal minimum wage being $7.25/hour, you would need to bend down 5,800 times per workday – which is every 12 seconds – just to hit that minimum wage mark. That equates to over 1.5 million deep knee bends per year. On paper, you would be far better off kicking that penny into the drain than looking to pick up more.

The truth is, a penny isn’t worth a penny anymore. It actually costs 1.4 cents to make that 1 cent value coin which weighs 2.4 grams. Not to mention the non-financial ramifications such as environmental damage from mining and manufacturing of the coin. It seems like a penny is more of an annoyance than a useful tool.

Statistics

Money may not grow on trees, but it is definitely everywhere on the street. Studies have shown that regardless of whether you believe in a lucky penny or collect it for loose change, the majority of Americans over the age of 55 actually will stop to pick it up. Very few millennials will do the same.

Surprisingly, household economics doesn’t really play a part in one’s likelihood of stopping for a penny. Americans who earn more than $80,000 per year are only 4% less likely to stop for a coin than Americans who earn $40,000-$80,000 a year.

So when someone picks up a penny where does it all go? The majority say it goes into a glass jar dedicated to loose change (36%), 10% of people say it goes into a piggy bank or their wallet.

Why do we still have pennies?

New coins being made at the U.S. Mint

People who are against abolishing the penny argue that without the penny in circulation, merchants will be forced to round up, which will result in raising the prices of goods and services purchased.

A dozen countries have recently dropped coins of questionable worth. Five years ago, Canada began to phase out its penny, estimating that this move would result in consumers saving $11 million Canadian dollars. Australia and New Zealand haven’t had one- or two-cent coins in circulation since the early 1990s. Even the U.S. Department of Defense has abandoned the penny overseas, claiming they aren’t cost-effective.

Yet, proponents of the penny are quick to suggest that the U.S. is somehow different. Most evidence doesn’t support these claims, but we tend to ignore best practices elsewhere “because we’re different”.

Do you still collect pennies? Take the survey below to see how you compare to the rest of the world!