The U.S. Mint cut the cost of making the penny by
nearly a third over the past two years, but the little copper-coated
coin still costs more than a cent to produce.
A new report shows the cost to produce a penny was 1.7 cents in the 2014 fiscal year. That’s down from 2.4 cents in 2011 but still more than face value.
And that won’t change.
“There are no alternative metal compositions that reduce the
manufacturing unit cost of the penny below its face value,” the biennial
report to Congress said.
The nickel, too, is dead weight for taxpayers. Production costs stood
at 8 cents last year, down from 11 cents. The lower cost per coin is
largely a result of rising production and reduced metal costs.
Other coins turn a profit. A dime costs 3.9 cents to make, and a
quarter 9 cents. All together, the Mint made $289.1 million on
seigniorage–the difference between the value of the coin and the cost to
make it–despite a $90.5 million drag from the penny and nickel.
Congress in 2010 told the Mint to examine ways to save money on coin production,
a mandate that so far has led to detailed testing of alternative metals
and production methods, including the use of a laser to produce coin
blanks.
The Mint estimates that switching up the metallic content of coins
could save taxpayers $5 million to $57 million a year, though vending,
amusement, laundry and other groups with coin operated machines warn
that it could cost them billions to reconfigure machinery and make other
adjustments needed to accept altered specie, the Mint said.
“At this juncture, there are several possible options to alter the
metallic compositions that would lower the costs of United States coins,
but the Mint does not recommend adopting any of these options until
ongoing research is completed on a promising alternative that has the
potential to duplicate the weight and [electromagnetic signature] of
existing coinage,” the Mint said.
Of course, the Mint could save $52.9 million if it simply eliminated the penny. That’s what Canada, Australia and other countries have done.
A Mint spokesman said he would let the report to Congress speak for itself.
Aside from noting that the penny can’t be produced for less than a cent, the report is silent on the topic.
