Coin Shortages Are the New Toilet Paper in the Ongoing Pandemic
There have been a lot of surprise these past few months, including a shortage on toilet paper early in the year. But why is there a coin shortage in America in 2020?
These past few weeks, as the world declared a worldwide pandemic, we've seen workplaces shut down, a weird time frame where finding toilet paper was like coming across a hidden treasure, and the economy has been stalled as we've never seen in our lifetime.
As the country slowly starts to re-open in some areas, we see a new surprise. Why is there a coin shortage in America 2020? Here's the lowdown on this strange occurance.
Why is there a coin shortage in America 2020?
According to USA Today, the latest random thing impacted by COVID-19 is coins in America. The news outlet says the Federal Reserve, the central banking system of the United States of America, there is a real issue with not having enough circulating coins to support the economy.
"With the partial closure of the economy, the flow of funds through the economy has stopped," Reserve Chair Jerome Powell said during a virtual hearing with the House Financial Services Committee, according to USA Today.
"We are working with the Mint and the Reserve Banks, and as the economy re-opens, we are starting to see money move around again."
Yes, the whole coin shortage issue is all related to the novel coronavirus, a side effect of shutting down or slowing down the economy that none of us regular people even thought could happen.
The Reserve Banks and Federal Reserve had to allocate the circulating coins, temporarily.
According to a statement released by the Reserve Banks and Federal Reserve, on June 15, they had to be selective about where they sent the remaining coins to.
"The COVID‐19 pandemic has significantly disrupted the supply chain and normal circulation patterns for U.S. coin," the statement said. "In the past few months, coin deposits from depository institutions to the Federal Reserve have declined significantly, and the U.S. Mint's production of the coin also decreased due to measures put in place to protect its employees."
How did COVID-19 impact the coin shortage?
We know that with the pandemic and the shutdown, people weren't spending as much money. But those that were buying things were recommended not to use coins out of fear that doing so could increase the spreading of the virus. Also, the U.S. Mint produced fewer coins than usual to help protect its employees from infection.
On top of this, those coin lobbies where people would go and deposit all their coins in exchange for bills were closed off, too, also impacting the coin distribution and circulation.
"The flow of coins through the economy ... kind of stopped," Powell said.
What are businesses supposed to do about the coin shortage?
This issue is genuine for businesses that are now just getting back up and running. While there is still the option for contactless payment —using electronic banking, credit cards, and debit cards — there always should be the ability to use coins.
So, what should a business do if they don't have enough coins to give exact change back?
Rep. John Rose, R-Tenn., told the House Financial Services Committee, according to NPR, that if businesses are unable to make exact change, they will need to round up or down, during a "time when pennies are the difference between profitability and loss," he warned.
The best way to prevent contracting or spreading the coronavirus is with thorough hand washing and social distancing. If you feel you may be experiencing symptoms of the coronavirus, which include persistent cough (usually dry), fever, shortness of breath, and fatigue, please call your doctor before going to get tested. For comprehensive resources and updates, visit the CDC website. If you are experiencing anxiety about the virus, seek out mental health support from your provider or visit NAMI.org.