The Cost of a Penny

As you probably heard, the Canadian government announced last week that it would no longer manufacture pennies, in part because it costs the Canadian government 1.6 cents to manufacture and distribute each penny. This has sparked renewed calls here in the U.S. for our own government to eliminate the penny; each of our pennies costs 2.41 cents to produce and distribute.

All those pennies add up. The U.S. government lost $60.2 million on the manufacture of pennies in 2011. That's a sharp increase from the $27.4 million they cost us in 2010, and the $19.8 million we spent in 2009.

But if we move to get rid of the penny, what does that mean for the nickel? We lose money on each nickel we produce, too; each one costs 11.18 cents. So we lost $56.5 million making nickels last year, too. The Obama administration is now seeking to change the composition of the nickel to make them cheaper to produce. Maybe that will be enough save them.