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The Price of a Penny

Alejandro Mallea/flickr

When you find all those pennies in your pockets or in the crevices of your couch, your probably feel pretty annoyed. Pennies are not very valuable and in sufficient numbers are heavy and bulky. But the next time you find a penny, you might want to consider how expensive it was to manufacture.

During fiscal year 2016, the U.S. Mint sustained a cost of 1.5 cents for every penny it made.  That cost is actually down from 2014 when the cost to make one penny equaled almost 1.7 cents according to the Wall Street Journal.  In 2011, when metal prices were higher, it cost 2.4 cents to make just one penny.

Experts say that despite years of effort to reduce the costs of production, it’s doubtful that the copper-coated coin will ever sink below the expense of making it. One obvious solution is to simply stop producing the penny, but Congress seems to have little desire to do away with the penny. That means that for now, Mint facilities in Philadelphia and Denver will continue to churn out pennies.  In fiscal year 2015, these facilities jointly produced more than nine billion pennies. 

Anirban Basu, Chariman Chief Executive Officer of Sage Policy Group (SPG), is one of the Mid-Atlantic region's leading economic consultants. Prior to founding SPG he was Chairman and CEO of Optimal Solutions Group, a company he co-founded and which continues to operate. Anirban has also served as Director of Applied Economics and Senior Economist for RESI, where he used his extensive knowledge of the Mid-Atlantic region to support numerous clients in their strategic decision-making processes. Clients have included the Maryland Department of Transportation, St. Paul Companies, Baltimore Symphony Orchestra Players Committee and the Martin O'Malley mayoral campaign.