With coins in short supply, the Federal Reserve formed a U.S. Coin Task Force, which will make recommendations on ways to cope with the shortage. A nationwide coin shortage caused by the coronavirus pandemic has revived a debate: Is now the time to eliminate the penny?
The shortage has led to renewed discussions about the fate of the penny, which has seen its purchasing power fall because of inflation while its production costs have risen. Even before the coin shortage, she already priced her greeting cards and coloring books at 50 cents or $1 increments for sales at festival stands to save the inconvenience of having to use pennies, she said.
Each penny costs about 2 cents to produce, according to a 2019 report by the mint. Pennies accounted for 59% of the 12 billion coins the mint manufactured last year.Some people support the penny for sentimental reasons. It was one of the first coins made by the mint after it was established in 1792. Robert Whaples, an economics professor at Wake Forest University, said his research, which examined data from a chain of convenience stores, showed that customers ended up breaking even over time because prices were rounded down as much as up, considering people buy multiple items and when accounting for tax.
It takes more money to make a penny than what it's actually worth--yes, even in bulk.