Tuesday, April 14, 2009

How Much Does Your Penny Cost?

“With each new penny and nickel we issue, we increase the national debt by almost as much as the coin is worth.” - Edmund Moy, Director of the U.S. Mint.

I find it interesting that it costs the U.S. Mint (and ultimately the tax payers) 1.5 cents to create a penny and nearly 9 cents to manufacture a nickel.

Copper prices have risen but the mint seems to be rooted in the mindset that says “but this is always the way things have been done.” Steel just happens to be a metal, that if used to manufacture pennies, could save up to $100,000,000 annually. Due to a shortage of copper during World War II the U.S. actually used steel to make pennies. That year was 1943.

I help individuals and businesses who are struggling nearly every day, doing things the way they’ve always been done, afraid to try something new. In the current Business Coaching Group that I’m leading, I pointed out on the very first day that the economy has changed. Regardless of the economy changing however, it’s important to point out that the market, and thus our reality, has changed so we must be doing things different, regardless of the economy.

The bottom line is this... If you’re doing the same things now that you were doing at this time last year, you’re getting left behind. Broaden your horizons. Try new strategies and ideas. Be open to change; after all, without change we wouldn’t have electricity or indoor plumbing and we’d all be riding horses and buggies. I bet the guy manufacturing horse whips down the street from Ford Motor Company in their early years had wished he embraced change instead of remaining rooted in his current reality.

1 comment:

Anonymous said...

Small correction and some thoughts: according to Wikipedia coins were changed from mainly copper to mainly zinc in 1982.
According to London Metals Exchange, via metalprices.com, cost per penny in bulk metal would be 0.34 cents (1.34 cents if we still used mainly copper). Which makes me think that the production costs continue to go up as the value of a penny (along with the dollar) goes down. I doubt even if the penny were made of styrofoam or plastic it would be cost effective.
This does little to change the question of how long we want to keep the penny, but I think that if only the penny were dropped, then people would ask where the extra pennies went. So I suspect that we keep it until the dime has a low enough value that we can drop the penny and nickel at the same time.