Canada will say goodbye to the penny this fall. As Finance Minister Jim Flaherty explained, "The penny is a currency without any currency in Canada, and it costs us 1.5 cents to produce a penny."
Of course, Canada isn't the only country to abandon the penny.
A government statement said New Zealand, Australia, the Netherlands, Norway, Finland, Sweden and others "have made smooth transitions to a penny-free economy."
So why does the U.S. still use pennies? Well, that's complicated. Back when he was a presidential candidate, Obama did say, "We have been trying to get rid of the penny for some time." But now the administration is simply looking into cheaper ways to produce the penny, which is currently made of zinc.
Opponents of getting rid of the American penny include the zinc lobby (well, clearly) and advocacy group Americans for Common Cents. The group explains its pro-penny position on its website.
Eliminating the penny is a losing proposition because it will result in rounding to the nearest nickel and higher prices for America's working families. This increased cost to consumers will be felt in everything from the grocery store to the gas pump. Pennies add up to millions of dollars every year for charities across the country. Simply put, the penny plays an important role in our everyday lives and in our nation's economy.
Perhaps the penny really is essential. But if Canada's no-penny economy succeeds, it might be a topic worth revisiting.
[Image via Flickr/dnorman]