On August 2, 1909, the Lincoln “wheat" penny replaced the “Indian Head" one-cent coin in circulation. Back then, that shiny new penny could buy you a nice piece of candy. But what about today? Not so much…
Today, almost all candy comes prepackaged in different sorts of wrappers and plastic containers. That hasn't always been the case, though.
Back in the “old days," candy was often sold in individual units. Small retailers, such as candy shops, soda fountains, “five and dime" stores and “mom and pop" shops, would display many jars of all sorts of different candies.
The candy was called “penny candy" because you could buy a piece of candy — or sometimes several pieces of candy — for just a penny. If you had a nickel or a dime, you could choose many different types of candy and put it all in one bag to take with you to school, the park or the movies.
Some popular penny candies from the past include: bottle caps, candy corn, jelly beans, red hots, bubble gum and licorice. Some of these candies can still be bought today in specialty candy shops.
For the most part, the days of penny candy are long gone. Although you may occasionally find a small store or a gum ball machine that will still give you a small piece of candy for only a penny, most candies have increased in price quite a bit since the days of penny candy.
Why is that? It's actually due to an economic phenomenon known as "inflation." Inflation means that the overall level of prices of goods and services increases over time. Due to inflation, most penny candy would be sold for a nickel or a dime today.
When inflation is particularly bad, prices can rise faster than incomes. When that happens, the amount of goods and services that people can purchase decreases.
In other words, a dollar doesn't go as far as it used to. As the value of a dollar decreases, people are able to buy less and less over time.
The federal government, through the Federal Reserve System and other agencies, pursues economic strategies to keep inflation as low as possible. When inflation is low, people are able to spend and invest their money more wisely because their purchasing power remains stable.