Last weekend, the U.S. Treasury Department officially announced it would stop producing the penny, the familiar one-cent coin, next year. From an economic standpoint, the decision seems fully justified. The U.S. Mint, the Treasury’s coin-manufacturing arm, estimates annual savings of $56 million.
Producing a penny, which is worth just one cent, costs nearly four cents (today it’s mostly zinc with a copper coating), and last year the U.S. government lost over $85 million producing nearly 3 billion pennies. Treasury officials believe the savings will grow even more once some of the manufacturing facilities are phased out.
If that weren’t enough, Americans throw away up to $68 million worth of pennies each year. The little copper coin is often left behind in plastic trays at airport security checkpoints after setting off metal detectors. Others are repurposed for art or home décor. According to the Federal Reserve, around 60% of all coins in active circulation—some $14 billion—are sitting idle in coin jars. The U.S. is now following countries like Canada, which stopped producing its penny in 2012, while Australia and New Zealand phased theirs out decades ago. Americans will still be able to use pennies for cash transactions, but as the coin gradually disappears, businesses will need to adapt their pricing. Digital transactions will remain unaffected.
A symbol of simplicity and hard work
The move makes economic sense, but for many Americans, parting with the penny is deeply sentimental. They’re about to go through what citizens of other countries have already experienced: the iconic French franc was replaced by the euro in 2002, and many in France still miss it. The deutsche mark, Germany’s postwar pride, also gave way to the euro and became a collector’s item—just like the Italian lira and, of course, the Greek drachma, one of the oldest currencies in history, which disappeared from the modern world in 2001 with Greece’s euro adoption. Not to be forgotten is the Israeli lira, which served the country from its founding until 1980, when it gave way to the shekel.
While more than a billion pennies will still circulate across America—hiding under couch cushions and waiting to be scooped up from sidewalks—no new ones will be minted for the first time in over 200 years. This is more than just an economic shift. The penny is deeply rooted in American culture. Despite its negligible monetary value, it holds emotional, historical, and educational significance.
Over the years, it became a symbol of simplicity, hard work, and the idea that even small things matter. Grandparents tell their grandchildren, “A penny saved is a penny earned.” Everyone is eager to offer their “two cents.” There’s a tradition of placing pennies in slippers, a superstition about picking one up off the ground, and even a belief that stumbling across a penny is a sign from a loved one who passed away.
The only president who regularly hangs out in Americans’ pockets
The first U.S. penny was minted in 1793, shortly after the founding of the U.S. Mint. It was made of copper and slightly larger than today’s version. Since 1909, the coin has featured the portrait of Abraham Lincoln, making him the first president to appear on a circulating American coin—and arguably the only one who regularly resides in Americans’ pockets. Many coin collections include rare pennies, such as the 1943 Lincoln penny made of steel instead of copper due to wartime shortages. Some of these coins sell at auction for tens of thousands of dollars.
Among those most saddened by the penny’s farewell are historians and archaeologists. “Since 1793, we’ve been filling the archaeological record with datable pennies, and now we’re going to stop,” said Frank Holt, a professor at the University of Houston who studies the history of coinage. “Two thousand years from now, archaeologists will be pulling out their last remaining hairs and saying, ‘What do I do now that I no longer have these datable objects?’”
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For Holt, the economic argument doesn’t hold water. “This coin far exceeds its face value,” he told the Associated Press. “This isn’t just an economic debate. Coins—especially pennies—are embedded in our culture. They reflect our politics, our religion, our art, our sense of identity, our ideals, and our ambitions. We see ourselves in them, and in America’s case, we decide which dead people matter enough to be commemorated on them.”
Even from a purely economic perspective, the penny’s phaseout sparks a broader conversation. One pillar of American retail culture is the $0.99 price tag—a psychological trick to make consumers feel like they're getting a better deal. In Canada, cash transactions were eventually rounded to the nearest five cents, but until clear regulations emerge in the U.S., rounding could lead to higher prices. For many, that will be another added financial burden.
While a large portion of the population has already moved to digital payments and may not remember the last time they carried coins or bills, plenty still rely on physical currency—even the humble penny.
“Cash is extremely important for many people to manage their budgets and keep control of their spending,” explained Ursula Dalinghaus, an assistant professor at Ripon College in Wisconsin who studies the anthropology of money. “I think we’re too quick to focus only on the production or distribution costs of coins, and not ready enough to consider the everyday experiences and interactions people have with them. So maybe you don’t use small change and don’t think about it, but others do.”
The Treasury’s announcement regarding the penny’s end came—intentionally or not—on “Lucky Penny Day,” May 23. (In the U.S., there’s a day for everything.) And Prof. Dalinghaus gets why such a day exists: “It’s more than just money. It’s more than a financial tool. We’ve imbued the penny with almost mystical powers—to bring us luck, or even to change our fortunes.”