It costs almost four cents to make a penny, and that’s one of the reasons they’re on the way out. The U.S. Mint plans to stop producing the coin — a move expected to save $56 million in reduced material costs.
The iconic copper coin has its fans. But one person cheering its demise is Robert Whaples, a professor of economics at Wake Forest University. He’s advocated for ditching the penny for decades.
WFDD’s Paul Garber spoke with Whaples about the problems with the penny and what he thinks about the future of hard currency in general.
Interview Highlights
On why it’s taken so long to end the penny after decades of debate:
"The Constitution, of course, gives Congress this power to decide what is our currency and coinage, and they're just too busy doing other things. So now we've got a president who loves executive orders and doesn't like the penny, and he said, 'Well, I'm just going to tell the Mint to stop making them.' It's not going to say there will be no more pennies. It's just an action that the President can do, right? Tell the Mint not to make any. The Mint seems to have dragged their heels a little bit. But finally, about a week ago, they decided that they were going to send in their last order for those little slugs that they make the penny out of. And once they've minted those up, they will make no more. And so I think it's just kind of inertia is the main reason it's taken so long. We got rid of the half penny in 1857, okay, so it has taken a long time and a good deal of inflation to get rid of the penny."
On the demise of an iconic coin:
"It is sad, and I think that's one of the reasons that we've hung on to the penny for so long, because people do have a sentimental attachment to it. But only enough to leave it in that jar on their drawer and not actually use the darn thing. It’s estimated there are 700 pennies out there in circulation per person. We're just not doing our job, kind of dissing the penny despite the fact that we sing songs about it. And I will add also that I think this will take a long time for us to actually see the penny disappear from circulation. Decades, I'm guessing, unless some additional legislation is passed, but we'll still have dear old Abe on the $5 bill. So if you love Abe, he's still there for you."
On the future of hard currency in a world going cashless:
"I think cash and coins will stay around for a long time. The function of money is to allow people to make transactions with each other. And so the kind of money we've had historically was just like one of the greatest inventions in human history. Because it got rid of barter, and then we could make all these trades very efficiently with each other. What we have now is a whole range of different modes of delivering that money, and I think more is better. … People like the extra options, different ways they can pay."
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