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Pennies Cost More To Make Than They’re Worth

(photo by Nelspin@Flickr)

So what happens when a penny costs more to make than what it’s worth?   That’s the problem the U-S Mint is having because the cost of the metal to make them keeps going up.

They used to make pennies out of all copper, but when the cost of copper kept going up, they went to pennies
made of mainly zinc with a thin coating of copper.  But now the cost of zinc has shot up.  Right now, for each penny the mint makes it costs 8- tenths of a penny for just the metal and another 6-tenths of a penny to produce it.  So every penny the mint makes cost 1.4 cents.   They’re losing nearly half a cent on every penny they make.

When you consider the U-S Mint makes nearly 9 billion pennies a year – those half pennies add up.  The mint
makes more pennies every year than all other coins combined.

So why so many pennies?  Number one, people horde them.  Some people just throw ‘em in a jar and that’s where they sit for years.  Some years ago, a couple I know saved enough pennies to tile their bathroom floor
with them.

Retailers demand them from banks because of sales taxes on items.  They have to give them in change because of the odd amounts the totals come out to be when you tack on the sales tax.  So that’s why the idea of getting rid of the penny has gone nowhere.

The real problem could come if metal prices rise so high that you could make money by melting them down for
the metal they contain.

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