America officially said goodbye to the penny, a coin that has been a ubiquitous presence for more than two centuries. The United States Treasury recently ordered its final shipment of penny blanks, the start of the one-cent coin’s long-term phaseout. More than a novelty in your pocket change, this change is symptomatic of shifting priorities in the economy and the growing dominance of a digital-first world.
The reason for the retirement of the penny is basic: money. It takes 3.69 cents—nearly four times the value of a penny—to manufacture and deliver one penny. This has taken a tremendous toll on the government. In 2024 alone, the Mint lost over $85 million by manufacturing over three billion pennies.
President Trump declared, “For far too long, the United States has minted pennies which literally cost us more than 2 cents.”. Let’s shave the fat off of our nation’s budget, even if it’s one penny at a time.” Additionally, the Department of Government Efficiency quoted that pennies cost taxpayers over $179 million in 2023.
The penny’s symbolic past is rich. It was first stamped in 1793 and survived thousands of redesigns and economic transitions. Abraham Lincoln’s face became the first human face on a regular U.S. coin, replacing Lady Liberty in 1909. There have been repeated pleas over the years to eliminate it. Politicians like the late Sen. John McCain and former Rep. Jim Kolbe made efforts to halt penny production, but none have succeeded so far.
Opinions regarding the future of the penny remain divided. Supporters argue that keeping the coin protects low-income families and maintains price stability. Mark Weller, Americans for Common Cents executive director, worries that rounding prices to the nearest nickel could be a squeeze for families surviving on cash for daily necessities.
The Federal Reserve finds that minorities and poor households use more cash and are concerned about a potential regressive effect. Penny rounding in Canada was reported to cost grocery shoppers millions of dollars annually, but the effect on each consumer was rather marginal.
Critics, however, see the penny as obsolete. Economist Greg Mankiw points out that the majority of people no longer use pennies, and many vending machines or parking meters won’t even give them out. Billions of pennies are lost or discarded annually, and so the Mint keeps turning them out. There is an unseen environmental toll as well, with mining and shipment of penny metals contaminating and putting out carbon emissions.
Practically speaking, eliminating the penny would mean cash payments are rounded to the nearest nickel. A few worry this will increase prices, but studies conclude the economic impact is minimal. According to a study conducted by the Diary of Consumer Payment Choice, eliminating the penny would cost American consumers an estimated $6 million annually—a relatively small amount. But if they eliminated the nickel, too, the cost could increase dramatically to over $55 million annually.
The unbanked and underbanked, in particular, as well as those who live by cash, will feel the pinch most. When more transactions are electronic, the overall effect of rounding will decrease. However, cash-reliant communities, such as the Amish in some areas, could feel very minor but real inconveniences.
Existing pennies will remain legal tender, but, as they are removed from circulation, will be more attractive to collectors or those with personal sentimental value. This process of phasing out also calls into question the future of other smaller denominations, like the nickel, which is far more costly to manufacture.
The penny’s death is utilitarian and metaphorical. It’s economically motivated, green, and powered by the next generation of payment technologies. As America changes, the penny will be remembered—in piggy banks, jarred coins, and family legacies of generations that counted pennies individually.