Is the American penny doomed to extinction? It's possible, especially if we follow in the footsteps of our northern neighbors.
The Royal Canadian Mint announced Thursday it will stop producing the one-cent piece by the end of the year.
And like its Canadian counterpart, the American penny now costs more to manufacture than the value of the coin, thanks to both inflation and the rising price of zinc, the coin's main ingredient, according to NPR.
"The penny is a currency without any currency in Canada," Canadian Finance Minister Jim Flaherty said on Thursday.
Canada's move will save the government $11 million annually, according to Canadian Finance Minister Jim Flaherty, who said that killing the penny is also good for local entrepreneurs.
"[Pennies] take up for too much time for small business trying to grow and create jobs," he said in his budget speech, according to the New York Times.
Some American business owners agree and are pushing to retire the American penny. Gary Shows, owner of a Berkeley, California office supply store, told National Public Radio that he no longer accepts pennies because of the hassle of parceling out single cents.
"One evening, I had this idea, that if we went penny free and rounded everything down to the customer's favor to the nearest nickel -- if everybody was four cents I decided that we would lose about $500 a year," he explained. Losing $500 was worth the convenience, he said, adding that it would also make his store's shopping experience more memorable and thus engender loyalty among customers.
"It's important to separate the idea of something being used, and something being useful," said Jeff Gore, the founder of Citizens for Retiring the Penny, in an interview with NPR. "There's just a very natural process where we have to retire the currency. The penny used to be a useful coin. But it hasn't been useful for many decades."
But not everyone agrees that rounding to the nearest nickel is a good idea.
"Human nature being what it is, there is sure to be more rounding up than down," wrote Barron's Randall Forsyth. He went on to say that if America retires the penny, "the losers are apt to be those who can least afford it -- middle -- and lower-income families who will have to pay higher prices as they're rounded up. So, you can keep this change."
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