The U.S. Mint, which manufactures pennies (and other U.S. currency), actually loses money on every penny it produces! Here's the breakdown:
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Production Cost: In 2022, it cost the Mint about 2.72 cents to make one penny according to their annual report ([invalid URL removed])
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Material Costs: The metal blank used to make a penny is mostly zinc with a thin copper plating. The cost of these materials contributes to the high production cost compared to the face value of the coin.
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Manufacturing Costs: The process of stamping, sorting, and transporting pennies also adds to the overall expense.
So, while a penny is worth one cent, it actually costs the Mint more than that to produce it.
Here are some reasons why the penny remains in circulation despite the production cost:
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Psychological Pricing: Some argue that pennies provide a sense of value and make prices seem lower.
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Cash Register Compatibility: Removing pennies might require adjustments to cash registers and vending machines.
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Tradition and Symbolism: Pennies have been a part of U.S. currency for over two centuries, and some see them as a symbol of tradition.
The debate about the penny continues, with some advocating for its elimination due to the production cost, while others see value in keeping it around.