For years, the debate over eliminating the penny has centered on its rising production costs and dwindling practical use. But what if the penny wasn’t the only problem?
Nickels drain more money from the U.S. Mint, raising the question: if the reason for eliminating the penny is to save money, does it make sense to keep producing an even more expensive coin? The United States has been losing money on penny production for nearly two decades, with each penny costing more than 2 cents to make.
In an effort to reduce wasteful spending, President Donald Trump directed the Treasury Department to stop minting new pennies, a move that could save the government an estimated $85 million per year.
In the 2024 fiscal year, the U.S. Mint reported a loss of $85.3 million from producing nearly 3.2 billion pennies. The cost to manufacture each penny rose to approximately $0.037, an increase from $0.031 the previous year.
However, the cost of producing nickels is greater than producing pennies; while the U.S. Mint loses about 2.7 cents per penny, the nickel is an even bigger money drain, costing 8.8 cents per coin to produce. In some years, the government had lost more on minting nickels than pennies.
Nickels cost nearly 14 cents to make, resulting in a loss of 8.8 cents per coin minted, adding up to an annual loss of $18 million in 2024.
Since pennies are minted in much larger quantities than nickels, the overall losses from penny production have typically been higher.
However, this isn’t always the case. In 2023, the Mint produced an unusually high number of nickels, resulting in a $93 million loss — surpassing the $86 million lost from pennies.
The financial losses from minting both pennies and nickels have been clear for years.
The debate over whether to keep the nation’s lowest-value coin has been ongoing for decades — even former President Barack Obama voiced his support for eliminating pennies in a 2013 interview.
While eliminating the penny is a step toward reducing wasteful spending, stopping there ignores an even bigger problem.
The nickel costs more to produce and has, at times, drained even more money from the U.S. Mint than the penny does. If the goal is to cut unnecessary costs, then it’s time to reconsider both coins.
The U.S. has phased out outdated currency before and other countries have successfully eliminated low-value coins without issue.
Instead of clinging to tradition at the taxpayers’ expense, there should be a serious discussion about whether pennies and nickels still have a use going forward, because it seems like their production may not be necessary.
