- Category: Penny News
A collapse in metals prices means U.S. coins, including the penny, are less expensive to make. The penny has reached its lowest cost in seven years. Each 1-cent coin, made almost entirely of zinc, now costs the taxpayer much less to produce and its likely to stay that way for the foreseeable future.
With global demand for zinc now slowing, particularly in China which has been the biggest consumer in recent years, prices have fallen significantly. Zinc prices dropped below $1445 a metric ton at one point last month, down 14% from a year earlier. Prices had spiked to a record $4580 a metric ton in 2006.
Apart from the lower cost, the penny continues to have many other benefits. Consumers benefit with a low denomination coin that helps keep prices in check. Without a one-cent coin, product prices would be rounded up to the nearest nickel, which hurts working families, said Mark Weller, Executive Director of Americans for Common Cents.
"There's always going to be a need for cash and for coin," Weller said. He noted that Federal Reserve's surveys show there are over 10 million Americans who are unbanked or under-banked and lack access to bank accounts or credit cards. "Not only will you have an overall rounding tax on the economy if you didn't have the penny around, but you would have a disproportionate impact on those that could least afford it," Weller added.
Add to this the huge benefit that pennies provide to charitable organizations, and the general level of public support for keeping the coin in circulation, as consistently reported by independent polling, and clearly, the penny continues to play an important role in the economy. The penny helps to keep inflation in check, protects America's hard working families, and allows charities to raise millions of dollars.