No Pennies for Your Thoughts

Since 1900, the price level in the United States has increased 25-fold?in other words, a penny in 1900 had about the same real purchasing power as a quarter does today. Even today there?s not much you can buy for 25 cents, but put a few quarters together and you?ve got yourself some time in a parking space, a load of laundry, or a soda from a vending machine. A penny, by contrast, has almost no purchasing power. That means that the real resources involved in producing one, though hardly enormous, are big enough to make it unprofitable. Ten years ago, a penny cost slightly less than one cent to produce, but rising commodity prices mean there are now more than 2.4 cents? worth of metal and labor in each one-cent coin. In 2011, the net cost to the taxpayer of minting pennies was a bit over $60 million. In the scheme of things, that?s not all that much money, but it?s money that?s worth saving.

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