Pennies Are Still Useless, And Nickels Cost Eight Cents To Make

Printing and minting money is one of the privileges that government has. In theory, this is a privilege because the face value of coins is more than they cost to make. The problem is that while we still have one-cent and five-cent coins here in the United States, those coins are worth less than they were decades ago when they were designed. Minting new ones costs taxpayers money.

It should not cost a government money to literally create its own money, yet it does. A new report from the U.S. Mint says that it costs 1.7 cents to create each penny, and 8 cents to make each nickel. The increase has to do with the cost of metals used in the alloys for coins, especially copper. Simply changing what coins are made of doesn’t solve the problem, since that would alter each coin’s electromagnetic signature. That’s what vending machines use to recognize each coin that customers insert, and changing the signature would require retrofitting every vending machine in the country: understandably, the vending industry is not keen on this idea.

Wait a minute, though–there aren’t any vending machines that accept pennies in the first place. It’s pretty much Coinstar, and the coin-counting machines that banks have for consumers to use that don’t cost as much as Coinstar.

It cost 1.7 cents to make a penny this year, and 8 cents to make a nickel [Washington Post]
2014 Biennial Report to the Congress [U.S. Mint]

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