Question of the Day: What Does It Cost to Make Our Most Popular Coins?
Some surprises to be found in this US Mint report:
“…the production cost of the one-cent coin (penny) has decreased 31.1 percent to $0.0166 from $0.0241; the production cost of the five-cent coin (nickel) has decreased 27.6 percent to $0.0809 from $0.1118; the production cost of the dime coin (dime) has decreased 30.8 percent to $0.0391 from $0.0565; and the production cost of the quarter-dollar coin (quarter) has decreased 19.7 percent to $0.0895 from $0.1114.”
- Penny costs 1.7 cents to make
- Nickel costs 8.1 cents to make
- Dime costs 3.9 cents to make
- Quarter costs 9.0 cents to make
Hmmm…according to the Mint, it costs more to produce to the penny and nickel than they are worth. The logical next question is why continue to produce them with their current metal composition. It turns out it’s not as simple as you might think:
The circulation of same denomination coins with different metal compositions creates unique challenges for the various coin stakeholders. Specifically, any change to the weight, shape, and most importantly the electro-magnetic signature (EMS) used to validate current circulating coins in coin acceptors would require equipment changes, potentially costing stakeholders between $2.5 billion and $6 billion. In addition, many industry stakeholders implored that no changes be made to the quarter because of its extensive use in many coin accepting industries (e.g., vending, laundry, amusement, and parking).
I guess we shouldn’t expect to see any changes in the near future.
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.