Would you guess that the U.S. Mint spends more producing each penny than they are worth? You would be right! The U.S. Lincoln Shield penny is the most expensive coin to make.
It costs about 2.1 cents to produce each penny.
Here is a breakdown of the costs associated with minting and distributing the penny.
- 1.8 cents are the production cost of the cent itself.
- 0.26 cents go toward administrative costs.
- 0.003 cents are spent on the distribution efforts of the Reserve Banks.
How Much Revenue Does the U.S. Mint Earn from the Penny?
While the U.S. cent’s seigniorage is more than 100%, meaning it costs more to produce than it is worth, the U.S. Mint still makes a yearly profit. This profit is not from selling pennies but from selling dimes and quarters with lower relative production costs.
Why Do Some People Want to Keep the Cent?
If significant net negative seigniorage is associated with the cent, why is it still in use? The debate over eliminating the lowest denomination of U.S. coins has continued for years.
Upwards of 66% of polled Americans want to keep producing the cent, with some arguing that the penny keeps costs down by not rounding up to the nearest nickel.
Furthermore, some argue that the penny is vital for non-profit organizations and charities that rely on contributions in the form of pocket change and pennies.
When Will the U.S. Mint Stop Making Pennies?
As of now, there are no plans in place to discontinue the U.S. penny. Several measures to end the series have been introduced, from the Price Rounding Act of 1989 to the C.O.I.N.S. Act of 1997, although no proposal has been successful.
