Do They Make Pennies Anymore? Why Production is Ending

Current Status of Penny Production

Despite ongoing discussions regarding their utility, the United States Mint continues to produce one-cent coins. These coins are primarily manufactured at the Philadelphia and Denver facilities. Annually, the U.S. Mint produces billions of pennies.

In recent years, the production volume has remained substantial, reflecting the persistent demand within the financial system. For instance, in fiscal year 2023, the U.S. Mint produced approximately 4.7 billion one-cent coins. This volume is distributed across the country to banks and financial institutions, which then supply businesses and consumers. The continued output underscores that pennies remain an active component of the national currency despite their low individual value.

The Penny’s Economic Realities

The penny’s economic viability is debated due to its production cost. For many years, the cost to manufacture a single one-cent coin has exceeded its face value. This discrepancy arises primarily from the fluctuating market prices of the metals used in its composition, which are predominantly zinc with a thin copper plating. In fiscal year 2023, for example, it cost the U.S. Mint an estimated 2.14 cents to produce each penny.

This loss highlights a significant financial inefficiency. Compounding this issue is the penny’s diminishing purchasing power over time due to inflation. A penny today buys significantly less than it did decades ago, reducing its practical utility in everyday transactions. This erosion of value means that while the coin still circulates, its economic impact on individual purchases has become negligible, often leading to pennies being set aside rather than actively used in transactions.

Perspectives on Penny Retention

Despite the economic arguments against the penny, various groups advocate for its continued circulation, citing social and practical considerations. One primary concern is the potential impact of rounding on consumer prices, particularly for lower-income individuals. Opponents suggest businesses might round prices up, imposing a small, regressive tax. This concern stems from the idea that while individual increases might be small, they could accumulate and disproportionately affect those with tighter budgets.

Pennies also play a role in charitable donations and community initiatives. Many organizations rely on coin drives or “take a penny, leave a penny” trays, which facilitate small, informal contributions. These mechanisms, while seemingly minor, can collectively contribute significant amounts to charitable causes and foster a sense of community giving. Some Americans also attach sentimental or historical value to the penny, viewing it as a symbol of American currency and heritage. This cultural attachment often contributes to public resistance against proposals for its discontinuation.