Do We Still Make Pennies? The Answer & Why It Matters

The one-cent coin, commonly known as the penny, has been a familiar presence in American pockets for centuries. Its continued existence and production are often questioned due to changes in the economic landscape. Understanding the penny’s current status involves examining its production, the financial implications of its continued minting, and historical debates surrounding its utility.

Current Penny Production

The United States Mint, under the authority of the U.S. Treasury, has historically produced all circulating coinage, including the penny. In May 2025, the U.S. Treasury Department announced it is winding down penny production, with new one-cent coins expected to cease circulation once the current supply of blanks runs out, likely in early 2026. The government placed its final order for penny blanks in May 2025.

Pennies have been produced in significant volumes annually. In 2024, the U.S. Mint produced 3.2 billion pennies, and 4.1 billion in 2023. Production peaked in 2016 at 9.365 billion coins. The Federal Reserve determines the number of coins the Mint produces, which are then distributed to banks and financial entities.

The modern penny, in use since October 1982, is primarily zinc with a thin copper plating. Earlier pennies were predominantly copper. The change in material composition was driven by the rising cost of copper, which made the metal content of the coin exceed its face value.

Economic Realities of the Penny

The economic viability of the penny has been a subject of considerable debate due to its production costs consistently exceeding its face value. As of 2024, it cost the U.S. Mint approximately 3.69 cents to produce and distribute a single penny. The government incurs a loss on every penny minted, a situation that has persisted for 19 consecutive fiscal years. The U.S. Mint reported a loss of $85.3 million from the 3.2 billion pennies produced in 2024 alone.

This financial dynamic is described in terms of “negative seigniorage.” Seigniorage is the profit a government earns from creating money, representing the difference between a currency’s face value and its production cost. When the cost of production exceeds the face value, as with the penny, the government experiences a loss, indicating negative seigniorage. The rising price of raw materials, particularly zinc, which constitutes the bulk of the penny’s composition, has contributed significantly to these increasing costs. Zinc prices have more than doubled since 2000, exacerbating the unprofitability of penny production.

Inflation has severely eroded the penny’s purchasing power over time. A penny in 1913, for instance, had the purchasing power equivalent to approximately 32 cents in 2025. This means the U.S. dollar has lost about 97% of its purchasing power since 1913. Consequently, the penny, once capable of buying items like a loaf of bread or a bottle of milk in 1909, is now largely considered to have minimal utility for everyday transactions. The diminishing value renders it often obsolete for practical purchases, contributing to the public’s questioning of its relevance.

Historical Discussions on Penny Elimination

Discussions surrounding the potential elimination of the penny have a long history in the United States, predating recent economic concerns. One notable legislative effort occurred in 1990 when Representative Jim Kolbe introduced the Price Rounding Act, proposing to eliminate the penny for cash transactions by rounding to the nearest nickel. Kolbe continued these efforts, introducing similar bills in 2001 and 2006, though none were enacted into law. These proposals consistently aimed to address the growing discrepancy between the penny’s face value and its production cost.

More recently, in 2017, Senators John McCain and Mike Enzi introduced the Currency Optimization, Innovation, and National Savings (C.O.I.N.S.) Act. This bill sought to halt penny minting for a decade and initiate a study on whether production could cease permanently. Despite such bipartisan efforts, the bill did not advance through Congress. The debate gained renewed momentum in February 2025 when President Donald Trump instructed the Treasury Secretary to cease penny production, citing wasteful government spending due to high manufacturing costs.

Following this directive, in April 2025, Representatives Lisa McClain and Robert Garcia introduced the Common Cents Act, a bill intended to formalize the end of penny production and mandate rounding cash transactions to the nearest nickel. While this bill and similar efforts have been introduced, Congress retains the power to formally eliminate forms of currency. The U.S. has a historical precedent for discontinuing low-denomination coins, such as the half-cent coin, which was withdrawn from circulation in 1857. At the time of its elimination, the half-cent had a purchasing power equivalent to approximately 17 cents in 2024 dollars.