Penny Profitability: What Does it Really Cost to Make a Penny?

Recent reports about penny costs have led some to ask if the government would save money by eliminating production of the penny. So, are we better off financially without the penny? The answer is "no" according to a recent report by Navigant Consulting, Inc. Click here to see the full report

Navigant found the government would actually lose money without the penny.  How?

First, the Mint's fabrication and distribution costs include fixed components that will continue to be incurred whether or not the Mint produces the penny.  Navigant estimates this fixed component at $13 million in FY 2011. Plus, there is $17.7 million in Mint overhead allocated to the penny that would have to be absorbed by the remaining denominations of circulating coins without the penny.

Second, under current Mint accounting, the nickel costs eleven cents to manufacture. In response to a 2006 question from the Subcommittee, the Mint put forward a scenario where nickel production doubled without the penny. It's hard to see how you save money by making more nickels that are losing more money. The data bears this out. Applied to FY 2011 cost and shipment data, the Mint would have incurred an additional net cost of $40.4 million without the penny last year.

Navigant concludes that with existing fixed costs, and the nickel substitution scenario outlined by the Mint, eliminating the penny would likely result in increased net costs to the Mint of $10.9 million, relative to the current state.

SUMMARY POINT

Penny elimination would not eliminate government losses, and will actually increase the overall loss to the Mint due to increased production of the nickel and ongoing Mint overhead costs. Moreover, consumers would be hit with a "rounding tax", the last thing Congress should consider with our current fragile economic climate.

 

President's Day - A Time to Celebrate Abraham Lincoln and Cheaper Pennies

President's Day gives us the chance - at least once a year - to recognize Abraham Lincoln's immense contributions to the country and a legacy that continues to enrich us daily.


President Lincoln is a unique cultural and historical figure," said Mark Weller, Executive Director of Americans for Common Cents. "It's not just that the front of the penny has had Lincoln's image since 1909, it's what Lincoln did for our nation," Weller added "He possessed all the qualities we want in a president -- the ability to unite a divided nation, honesty, strength, and humility," Weller concluded.


For the full press release, please click here

 

Special Announcement!

Pennies for Pasta and Pennies for Patients

These are run by The Leukemia and Lymphoma Society through its local chapters as part of its renamed Student Series program:  www.studentseries.org

For more information, you should call your local Chapter which may be found by going to the Society's website at: www.lls.org

Please note Americans for Common Cents does not get actively engaged in any fundraising activities.

Collapse of the zinc market means the penny is cheaper to make; saves taxpayers!

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.

Click here to read more.

More than Two-Thirds of Americans Still Favor Keeping the Penny

Recent Poll Shows Increasing Penny Support and Concern About Price Increases If Penny Is Eliminated

WASHINGTON--(BUSINESS WIRE)--A poll released today by Americans for Common Cents (ACC) continues to show overwhelming and increasing support for the penny by the American public. 68% of those surveyed favor keeping the penny in circulation, representing a slight increase since the last poll in 2012.

"These results confirm the strong and unwavering support the penny continues to receive from Americans," said Mark Weller, Executive Director of ACC. Weller's group includes more than 50 organizations that support continued production of the penny.

For the full article, please click here

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