A collapse in metals prices means U.S. coins, including the penny,
are less expensive to make. The penny has reached its lowest cost in
seven years. Each 1-cent coin, made almost entirely of zinc, now costs
the taxpayer much less to produce and its likely to stay that way for
the foreseeable future.
With global demand for zinc now slowing,
particularly in China which has been the biggest consumer in recent
years, prices have fallen significantly. Zinc prices dropped below $1445
a metric ton at one point last month, down 14% from a year earlier.
Prices had spiked to a record $4580 a metric ton in 2006.
Apart
from the lower cost, the penny continues to have many other benefits.
Consumers benefit with a low denomination coin that helps keep prices in
check. Without a one-cent coin, product prices would be rounded up to
the nearest nickel, which hurts working families, said Mark Weller,
Executive Director of Americans for Common Cents.
“There’s
always going to be a need for cash and for coin,” Weller said. He noted
that Federal Reserve’s surveys show there are over 10 million Americans
who are unbanked or under-banked and lack access to bank accounts or
credit cards. “Not only will you have an overall rounding tax on the
economy if you didn’t have the penny around, but you would have a
disproportionate impact on those that could least afford it,” Weller
added.
Add to this the huge benefit that pennies provide to
charitable organizations, and the general level of public support for
keeping the coin in circulation, as consistently reported by independent
polling, and clearly, the penny continues to play an important role in
the economy. The penny helps to keep inflation in check, protects
America’s hard working families, and allows charities to raise millions
of dollars.