Yesterday marked the end of an era that has lasted over 232 years. 22 May 2025 is the day the U.S. penny died.
Or rather, it is the day the United States Mint ordered the coin blanks it will use to make pennies for the last time. When that final supply runs out later this year, no more U.S. pennies will be made, per an order issued by President Trump on 9 February 2025.
The cause of the penny's death is inflation. According to the U.S. Mint's 2024 annual report, it cost about 3.69 cents to make and distribute each one-cent penny produced in 2024.
From a cost perspective, the writing has been on the wall for the U.S. one-cent coin for a long time. Just the metal alone in the modern copper-plated, 97.5%-zinc Lincoln pennies minted since 1982 was worth 71% of their one-cent face value on 22 May 2025.
It could be worse. The value of the metal in the 95%-copper pennies minted from 1909 through 1982 is worth 284% more than their face value.
Unlike previous episodes when the cost of the metal needed to make a penny surged, today's labor costs have increased substantially, which add on top of the value of the metal needed to make the penny.
Even so, it would be possible to justify continuing to mint pennies at a loss if the demand for pennies was high enough. The increasing volume of electronic transactions however has put an effective cap on the needed supply of pennies. The combination of factors justifies the decision to stop making U.S. pennies.
There are benefits to be realized in stopping penny production. The U.S. Treasury Department anticipates "an immediate annual savings of $56 million in reduced material costs". And that doesn't include the related labor savings and environmental benefits.
The United States is finally applying something from the lessons of Doc Palmer, the "godfather" of Canada's "Ban-the-Penny" movement. Only about 13 years later than it should have.
Image credit: U.S. Mint. Learn > Coin & Medal Archive > Circulating Coins > Penny. The obverse and reverse images of the 2025 Lincoln Penny are United States Government works and are therefore public domain, which we've animated to show off both sides of the same coin. If you look very closely and are wondering about those very tiny letters tucked in bottom of the designs on the 'heads' and 'tails' sides of the penny, they are the initials of the artists who created them (VDB is Victor D. Brenner, LB is Lyndall Bass, and JM is Joseph Menna).
Labels: economics
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