Rising raw material prices are hitting the United States Mint hard. It now costs more than 2.5 cents to make a penny, and more than 10 cents to make a nickel, resulting in a net loss of $171 million to mint these coins in 2022, according to The Washington Times.
In addition to pennies and nickels, the cost of dimes and quarters have also gone up, but they still cost less to make than their value. The U.S. Mint admitted, “The average price of copper, nickel and zinc, which are the primary metals in each coin, have increased each year, resulting in an overall increase in the cost of metal for each denomination.”
Total losses on these coins have been steep, with pennies taking a net loss of $92.7 million to produce, and nickels losing a total of $78 million, totaling $171 million in gross loss.
While inflation hasn’t helped, the costs to mint these coins have been high for some time. Even before the aggressive inflation, in 2020, it cost 1.76 cents to make a penny and 7.42 cents to make a nickel.
Some lawmakers are concerned about the rising costs of producing coinage. Sens. Joni Ernst (R-IA) and Maggie Hassan (D-NH) have introduced bipartisan legislation that would allow the U.S. Mint to change production methods to lower costs.
While the debate over the utility of the penny has raged for some time, the total loss the U.S. takes on these coins year after year should cause the government to seriously rethink which coins we continue to mint and how to mint them.
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