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Penny-pinching holiday shoppers may be more thrifty than you think.
The U.S. Mint spends more to make coins stamped with portraits of Abraham Lincoln and Thomas Jefferson than the currency is worth, according to U.S. Rep. Steve Rothman.
"Currently it costs more than a penny for the U.S. Mint to make a one cent coin and more than a nickel to make the five cent piece," Rothman (D-9th Dist.) said in a statement submitted to the Congressional Record on Nov. 2. Rothman’s statement called attention to an opinion article in the New York Times written by a Bergen County freeholder that suggested alternate materials for penny production.
PolitiFact New Jersey found the congressman is right on the money.
The total cost to produce and distribute a penny in 2010 was 1.79 cents, according to the U.S. Mint’s most recent annual report.
A nickel cost the government 9.22 cents.
Overall, the U.S. Mint lost $42.6 million on the more than 3.48 billion pennies and 359 million nickels produced and distributed in fiscal year 2010.
The government has been losing money on producing these smaller denomination coins since 2006, when a rise in the price of the metals used to make the coins increased the overall production costs, according to annual reports.
The Mint’s most recent annual report said that "changing the composition of coins to less expensive alternative materials could generate significant cost savings." The composition of the penny and nickel is set by statute.
"In 1982, the penny composition changed from copper alloy (95% copper, 5% zinc) to copper plated zinc (total content 97.5% zinc, 2.5% copper)," Gordon Hume, a spokesman for the U.S. Mint told us in an email. "The nickel has remained unchanged since 1866 at 75% copper, 25% nickel. The only exception was from 1942 to 1945 when the nickel was 56% copper, 35% silver, 9% manganese."
This summer the Mint contracted Concurrent Technologies Corporation, a Johnstown, Pa.-based company, to research and recommend less expensive metallic materials for coin production.
It’s worth noting that while the U.S. Mint is losing money on pennies and nickels, it’s still turning a profit on higher denomination coins.
In 2010, dimes cost 5.69 cents to produce and distribute, quarters cost 12.78 cents and dollar coins went for 31.57 cents.
Rothman claimed it costs more for the U.S. Mint to produce a penny and nickel than the face value of the coins.
It costs 1.79 cents to produce and distribute every penny the Mint makes. And every nickel costs 9.22 cents.
So, you can bank on those numbers. We rate the congressman’s statement True.
To comment on this ruling, go to NJ.com.
The Library of Congress, Congressional Record, Nov. 2, 2011
United States Mint, United States Mint Annual Reports, accessed Nov. 21, 2011
Email interview with Aaron Keyak, communications director for U.S. Rep Steve Rothman, Nov. 21, 2011
Phone and email interview with Gordon Hume, deputy director in the office of public affairs for the U.S. Mint, Nov. 21, 2011
United States Mint, United States Mint Moves to Limit Exportation & Melting of Coins, Dec. 14, 2006
Concurrent Technologies Corporation, Concurrent Technologies Corporation Awarded United States Mint Contract to Research Alternative Metals for the Production of U.S. Circulating Coins,Aug. 18, 2011
United States Mint, United States Mint Limits Exportation & Melting of Coins, April 17, 2007
The New York Times, Penny Foolish, Aug. 20, 2011
USA Today, Coins cost more to make than face value, May 10, 2006
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