That Pennies Should Be Abolished

They Cost More Than They Are WorthIn 2006 the cost to produce a penny rose above one cent. This is because the raw minerals of the penny exceeded the one cent which the penny itself is worth. This problem has only been worsened, and in 2011 it cost the US Mint 2.4 cents to produce a one-cent-penny[1]. This means that every year, with the US Mint producing 4.3 billion pennies[1], the United States is spending $100 million on $43 million worth of pennies, effectively donating $57 to no one every year. With the penny costing us more than it is worth, then we should not produce it anymore.Opportunity CostWe've all heard that age old saying "Time is money", well it turns out that this old saying in fact has a fancy term in economics: opportunity cost. As defined by the New Oxford American Dictionary: "(Opportunity cost is) the loss of other alternatives when one alternative is chosen."[2]. As I will demonstrate, the handling of a penny is a form of opportunity cost Before I make my argument I must make this point clear: it doesn't matter what people handling pennies would have done otherwise, only that they spend it doing something not worth their time in the first place, because in economics, time really is money, and their time is worth more than thatThe median wage in the United States is $17 per hour[3]. This means that it takes the average person two seconds to earn one cent, and as such it is not worth one's time. Even if it takes only four seconds to handle a penny, that means that two seconds are wasted in terms of productivity in terms of the handling of pennies. This is equivalent to losing $1 billion each year in productivity[4]. Another economist, Robert Whalpes, has estimated the opportunity cost of penny production at $300 million[5]. Regardless of which of these figures is correct, the underlying problem remains, which is that the very existence of pennies, costs the US people money, and lots of it. Abolishing the penny would solve this problem.Pennies Are UselessThe purpose of money is to facilitate the exchange of goods and services. Pennies do not serve this purpose.Pennies are not usually accepted in bulk, only being used to give people exact change, and as demonstrated, this exact change is not even worth its opportunity cost. If one wished to avoid these problems of opportunity cost to other people waiting in line to pay for their goods and services, then they would have to use a machine: none of which, except Coinstar, accept them. As a result of this, most pennies just end up in glass jars out of circulation. To quote Greg Mankiw, a Professor of Macroeconomics at Harvard University: "The purpose of the monetary system is to facilitate exchange, but... the penny no longer serves that purpose"[6]. When a coin fails to fulfil its purpose, it is time to get rid of it.ConclusionI have provided three arguments: the penny costs more than it is worth, it provides a significant opportunity cost, and it fails to fulfil its purpose as money. All of these arguments stand. As such, the resolution is affirmed.Sources1: http://tinyurl.com...2: http://tinyurl.com...;3: http://tinyurl.com...;4: http://tinyurl.com...;5: http://tinyurl.com...6: http://tinyurl.com...