Production of one-cent coins in the United States temporarily ceases - Cessation of One-Cent Coin Manufacturing in the USA
In a notable shift after 230 years, the United States has announced the cessation of the production of its one-cent coin, commonly known as the penny, starting next year. According to multiple U.S. media outlets quoting the Treasury Department and coin producers, the last order for penny production has been placed.
The decision stems from the high cost of producing the coin, which exceeds its value by almost four cents. To mitigate this, businesses are being encouraged to round prices to the nearest five-cent increment. The move is expected to save the U.S. Mint around $56 million annually in material costs. President Donald Trump had previously advocated for ending penny production due to the high costs associated with it.
Simultaneously, Germany is grappling with the issue of small change, considering the elimination of one- and two-cent coins. The proposal is being discussed by the "National Cash Forum" initiated by the Bundesbank and includes representatives from the retail sector, banking associations, cash handlers, and consumer protection organizations. One reason provided for this move is the high production costs that exceed the value of the coins.
Several European countries, including Finland, the Netherlands, Slovakia, Ireland, Italy, Belgium, and Estonia, have already implemented regulations for cash transactions to be rounded to the nearest five-cent increment, although they have not completely abolished the smallest cent coins. This would require a decision at the European level.
High production costs and limited utility are the primary reasons behind the consideration of phasing out low-denomination coins in both the U.S. and Germany. The U.S., aiming to save millions annually, intends to stop penny production, while Germany might also benefit from similar cost reductions if it were to phase out its two-cent coins. However, the implications for consumers and the economy must be carefully evaluated, especially in terms of transaction rounding and potential impacts on pricing strategies.
The community policy should consider the potential impacts of phasing out low-denomination coins, such as the penny in the United States, on employment policies within the industry, particularly finance, where rounding prices to the nearest five-cent increment may influence transactions and pricing strategies. The industry might need to adjust employment policies to accommodate changes in coin production and potential fluctuations in consumer behavior.
As Germany ponders the elimination of one- and two-cent coins, it is crucial for employment policy discussions to account for the financial industry's reliance on small change and the potential effects on job roles related to cash handling and management, especially in retail and banking sectors.
