The cost of producing a penny fell 31.1 percent in the 2014 fiscal year, but still exceeds a penny, according to a new report from the United States Mint. Whereas last year it cost $0.0241 to manufacture a penny, it now costs only $0.0166. The price of making a nickel, dime, and quarter also decreased in the latest year, though the nickel, like the penny, still has a production cost that exceeds its transaction value ($0.0809).
The penny is a topic of perennial debate in the U.S. because, as the Wall Street Journal stated succinctly in September, it is “easy to lose and expensive to produce.” Two years ago, Matt Yglesias made the case in Slate that the U.S. should follow Canada’s lead and ditch the penny entirely. He’s not alone. Citizens to Retire the Penny, a group founded by an MIT physics professor, says the penny drains “almost $900 million from the national economy every year.”
But since we haven’t ditched the penny, what are we still using it for? It’s a little unclear. In May, NPR’s Planet Money had a pair of reporters wander around Manhattan in search of anything they could buy for a single cent. Spoiler alert: They failed to find it. One woman said that she might be able to sell a single sequin for a penny but that the transaction wasn’t “worth her time.” The main arguments for keeping the penny these days seem to come from the zinc industry and relate to vague fears that getting rid of the single-cent will cause merchants to round up all their prices.
Could better technology bring a solution to the penny problem? Unfortunately, getting the coin to cost a cent or less may be an unattainable goal. The Mint warns that “there are no alternative metal compositions that reduce the manufacturing unit cost of the penny below its face value.”