Increasing demand for metals (due, in part, to the rise of electric vehicles) has caused the cost of minting currency to soar. Last year, it cost the US government 1.5 cents to make a penny and 7 cents to make a nickel.
Zinc, which makes up 97.5% of the penny, increased 3x in price over the last 15 years — and, as of 2017, pennies cost the US government $69m to make (nickels another $9.5m).
Since the cost of a penny eclipsed its value in 2006, debate has raged about whether to eliminate it from circulation. But, despite attempts to pitch the penny, consumers are dead set on pinching them.
The penny has survived assassination attempts before
Pennies have ruffled feathers across the political spectrum: President Barack Obama ridiculed pennies as symbols of government inefficiency, and John McCain co-sponsored a bill to suspend penny production as part of a currency overhaul proposed as a $16B savings.
But despite opposition from politicians and advocacy groups, polls show people take particular pride in pennies. When Chipotle tried to eliminate pennies by rounding, the burrito-makers were roasted for ‘stealing’ from ‘hapless customers.’
Putting pennies out to pasture
Other countries seem to have more sense about their cents. Canada nixed the penny in 2013 and adopted the rounding rule. Australia killed off its penny in 1993 and plans to phase out its nickel soon.
In America, scientists are already at work developing a new alloy to drive down the cost of nickels. If the US Treasury accepts this new formula, these fresh nickys could end up in a cash register near you.
For reference, when America killed off the half-penny in 1857, it had the buying power of a modern dime. So, economically, it would be a smaller deal to eliminate today’s penny — but, no one wants to let go of Lincoln.