Podcast Summary: The Journal - "Stop Making Cents: The End of the Penny"
Episode Details:
- Title: Stop Making Cents: The End of the Penny
- Release Date: June 2, 2025
- Hosts: Ryan Knutson and Jessica Mendoza
- Production: The Wall Street Journal & Gimlet, in partnership with Spotify
Introduction
In this episode of The Journal, hosts Jessica Mendoza and Ryan Knutson delve into the impending retirement of the penny in the United States. Titled "Stop Making Cents: The End of the Penny," the discussion explores the historical significance, economic implications, and cultural sentiments surrounding the humble one-cent coin.
Reminiscing the Penny's Legacy
[00:08] Jessica Mendoza opens the episode with a heartfelt remembrance of the penny, inviting their finance expert, Oyen Adedoyan, to reflect on its legacy.
[00:15] Oyen Adedoyan nostalgically describes the penny as "small but mighty," highlighting its pervasive presence in everyday life and even its symbolic journey to Mars. He metaphorically places the penny in various overlooked corners of our lives, emphasizing its long-standing role across generations.
Notable Quote:
“Penny was small but mighty. She inspired so many, she touched so many, she traveled so far.”
— Oyen Adedoyan [00:15]
The Historical Journey of the Penny
The conversation shifts to the historical origins of the penny. Oyen traces its inception to the Coinage Act of 1792, which established the Philadelphia Mint and introduced the first pennies featuring Lady Liberty. This design choice distinguished American sovereignty from British monarchal symbols.
In 1909, the penny underwent a significant transformation by featuring Abraham Lincoln, a figure deeply ingrained in American history. Oyen asserts that this version of the penny has garnered widespread affection and serves as a symbol of the nation's enduring legacy.
Notable Quote:
“The penny was born out of the coinage act of 1792... she represents Lady Liberty.”
— Oyen Adedoyan [03:06]
Rising Production Costs and Material Shifts
The discussion transitions to the economic challenges associated with producing pennies. Originally composed almost entirely of copper, the rising cost of this metal prompted the US Mint in the 1980s to switch to a zinc core coated with copper to mitigate expenses. Despite this change, production costs continued to escalate.
[04:47] Oyen highlights that by 2006, the cost to produce a single penny surpassed its face value, marking a critical turning point. The following year, the cost of production had risen to 4 cents per penny, resulting in the Mint incurring an $85 million loss in penny production alone.
Notable Quote:
“In 2006 was really a turning point for the penny... the cost of the penny was costing more than it was worth to make.”
— Oyen Adedoyan [04:27]
The Wasteful Fate of Pennies
Jessica Mendoza and Oyen discuss the widespread waste associated with pennies. Pennies frequently end up discarded in places like furniture cushions, fountains, and laundry machines. A visit to a waste management facility revealed that Americans dispose of approximately $68 million worth of coins annually, with a significant portion being pennies.
Notable Quote:
“Americans throw away about $68 million worth of coins a year.”
— Oyen Adedoyan [05:37]
Governmental Acknowledgment and Political Actions
The government's awareness of the penny's issues is chronicled, referencing efforts during the Obama administration to explore cost-reduction measures and alternative materials. However, legislative inertia prevented substantive changes.
With the advent of the Trump administration, the focus intensified on eliminating governmental waste, leading President Trump to direct the Treasury to stop minting pennies. He stated on Truth Social:
Notable Quote:
“Far too long, the United States has minted pennies which literally cost us more than 2 cents. This is so wasteful.”
— President Trump via Oyen Adedoyan [07:28]
Oyen clarifies that while the President can halt production, Congress holds the authority to officially abolish the penny from circulation. Nevertheless, the Treasury's decision marks a decisive step towards phasing out the coin.
Phase-Out Plan and Future Projections
The US Mint has initiated the phase-out process by placing its last order of blanks—the metal discs for coinage. Currently, existing pennies remain legal tender, but projections indicate that the supply will be exhausted by early next year.
Notable Quote:
“The mint has placed its last order... they're estimating that they're going to officially run out of pennies by early next year.”
— Oyen Adedoyan [08:48]
Opposition: The Case for Keeping the Penny
The episode features Mark Weller, Executive Director of Americans for Common Sense, advocating for the penny's retention. His arguments encompass both practical and sentimental reasons:
- Cash Transactions: The importance of physical cash, especially for those without access to digital payment methods.
- Security: Cash transactions are immune to digital hacking threats.
- Cultural Attachment: Nostalgia and the symbolic value of saving pennies resonate with many Americans.
Notable Quote:
“Cash is king. It's useful during natural disasters. And also millions of Americans don't have access to credit cards or bank accounts.”
— Mark Weller [09:27]
Economic Implications of Eliminating the Penny
A central debate explores the economic consequences of removing the penny:
-
Rounding Mechanism: Without pennies, cash transactions must round to the nearest five cents. Mark Weller warns that businesses, driven by profit motives, will likely round up, disadvantaging consumers and potentially contributing to inflation.
Notable Quote:
“Businesses have an incentive to maximize profits... So the rounding is a big, big problem. And consumers lose in that scenario.”
— Mark Weller [10:27] -
Cost of Nickels: Eliminating pennies would increase reliance on nickels, which already cost 14 cents to produce, resulting in a 9-cent loss per nickel.
Notable Quote:
“The nickel now costs 14 cents, so we're going to be losing 9 cents on every nickel that we make.”
— Mark Weller [12:04] -
International Precedents: Countries like Australia and Switzerland have phased out low-denomination coins, experiencing increased nickel production costs without significant savings.
Cultural and Psychological Impact
The potential shift in consumer behavior and pricing strategies is examined. Oyen Adedoyan ponders whether iconic pricing schemes, such as items ending in 99 cents, will need rebranding to align with the absence of pennies.
Notable Quote:
“There's some kind of psychology in seeing something ending with 99 cents over like a round number.”
— Oyen Adedoyan [14:03]
Furthermore, Jessica Mendoza raises a tongue-in-cheek concern:
[13:22] Jessica: “I'm thinking, does this mean that we won't be able to buy anything for 1999 anymore? Is this the end of the 1999 nine?”
The Road to a Cashless Future
Oyen reflects on the evolving relationship between Americans and physical currency. As digital transactions rise, the penny's obsolescence may signal the beginning of a broader transition towards a cashless society. The pandemic accelerated this shift, diminishing the role of coins in daily transactions.
Notable Quote:
“This move to kind of end the penny is the first battle towards a potential cashless future.”
— Oyen Adedoyan [14:48]
Conclusion
As the United States approaches the end of an era with the penny's retirement, the episode underscores the intricate balance between economic practicality and cultural sentiment. While the phase-out aims to reduce governmental waste and production costs, the reaction from consumers and businesses will shape the future landscape of American currency.
Final Thoughts: The retirement of the penny encapsulates broader themes of modernization, economic efficiency, and the enduring attachment to tangible symbols of national identity. As The Journal aptly concludes, the full impact of this change remains to be seen, marking a pivotal moment in the nation's financial evolution.
Additional Reporting By: Joseph Pisani and Ken Thomas
Credits: The Journal is a co-production of Spotify and The Wall Street Journal.