Sofia Martinez
In 2012, it was reported that the cost of producing a penny was 2.4 cents, while a nickel cost 11.2 cents to produce. This meant that the US was in the position of minting pennies and nickels that cost more than their face values to make. The rising cost of producing the one-cent coin has also been cited by President Trump as a reason to stop minting pennies. One proposed solution to this problem is to make pennies from less expensive materials, such as plastic or ceramics.
| Characteristics | Values |
|---|---|
| Cost of producing a one-cent U.S. penny | 2.4 cents |
| Cost of producing a nickel | 11.2 cents |
| Cost of copper | $3.80 per pound |
| Cost of zinc | 91 cents per pound |
| Cost of steel | 36 cents per pound |
| Cost of PET virgin bottle resin pellets | 83-85 cents per pound |
| Cost of PET recycled pellets | 58-66 cents per pound |
What You'll Learn
The cost of making a penny is 2.4 cents
It currently costs 2.4 cents to produce a one-cent U.S. penny. This is due to inflation and the rising price of metals. The United States is in the unusual position of minting pennies and nickels that cost more than their face values to make. Minting one nickel costs 11.2 cents.
Some people advocate for the elimination of the penny altogether, while others believe that we must spare the spare change in order to prevent jarring the economy. One possible solution is to debase the nickel by replacing the 75% copper in it with zinc, or to make the cores of pennies and nickels out of something entirely non-metallic, such as plastic. Plastic is inexpensive and would be a good option from a production standpoint.
Another strategy would be to switch to an even cheaper metal, such as steel, which currently costs around 36 cents per pound. Switching from zinc to steel would reduce the production cost of the penny to well under one cent, even if the coin's copper cladding were retained for consistency.
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Inflation and the rising price of metals have contributed to the high cost
Some people have suggested eliminating the penny altogether, or replacing the metal in pennies and nickels with a cheaper alternative, such as zinc or steel. However, others believe that this could have a negative impact on the economy.
One possible solution is to replace the metal in pennies and nickels with a non-metallic substance, such as plastic. Plastic is inexpensive and would be a good option from a production standpoint. However, the price of plastic is dependent on the price of oil, which is subject to fluctuation.
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President Obama proposed using less expensive materials to make pennies
It currently costs 2.4 cents to produce a one-cent U.S. penny. This is due to inflation and the rising price of metals. President Obama proposed using less expensive materials to make pennies, which would save more than $100 million a year. The Treasury has been analysing new metals for the past couple of years, but the administrative costs for making 4.3 billion pennies a year is around 0.5 cents per penny.
Some people have advocated for eliminating the penny altogether, while others believe that cheaper coins could make them easier to counterfeit. One suggestion is to use plastic, which is inexpensive and would be a good option from a production standpoint. However, the price of plastic is dependent on the capricious price of oil. Steel is another option, as it currently costs around 36 cents per pound, which would reduce the production cost of the penny to well under one cent.
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Ceramics could be used to make pennies
It currently costs 2.4 cents to produce a one-cent U.S. penny. This is due to inflation and the rising price of metals. One suggestion to reduce the cost of production is to use plastic, which is inexpensive and would be a good option from a production standpoint. However, plastic would not be accepted by the public as it would be easily exposed as being lightweight and fake.
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Plastic is an inexpensive option but won't work for other reasons
Plastic is an inexpensive option and would be a good choice from a production standpoint. However, there are several reasons why plastic wouldn't work for coins. Firstly, the rising cost of oil and natural gas has increased the price of virgin plastic. Secondly, plastic coins would be vulnerable to PVC damage, which can cause residual deposits and microscopic pits and indentations that cannot be repaired. Finally, switching to plastic coins could potentially jar the economy, as some people believe that eliminating the penny altogether could have negative consequences.
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Frequently asked questions
It costs 2.4 cents to make a one-cent coin.
Inflation and the rising price of metals have combined to put the United States in the rather silly position of minting pennies and nickels that cost more than their face values to make.
President Barack Obama proposed an alternative solution in his 2012 budget: He wants the U.S. Mint to investigate ways of making pennies and nickels from less expensive materials, which he hopes could save up to $100 million per year.
Plastic is inexpensive and would be a good option from a production standpoint, but it wouldn't work for other reasons. Ceramics could be made from silica (SiO2) and alumina (Al2O3), both inexpensive, and perhaps with a bit of heavier oxide such as titanium oxide added for weight.
