If Pennies are Doomed, is the Nickel Next?

CALLS FOR THE NICKEL TO BE DISCONTINUED

- BY MIKE FULJENZ

In the February/March 2025 issue of COINage, my column asked the rhetorical question, “Do ‘Pennies’ Make Sense?” I concluded that in the United States they do not. U.S. President Donald Trump posted his own statement on social media about cents and, without making mention of my column, expressed the same views as mine.

Now, what about the nickel and paper dollar? Not so fast! While there are solid financial reasons to eliminate both of these, I believe we need to take a stairstep approach. Canada eliminated its penny and replaced its paper dollar with a coin. Anecdotally, Canadians I have spoken with told me it has worked well. But in this column, I want to address the nickel, or five-cent piece, which, in the future, should be the next U.S. coin to be eliminated, or at least modified.

The one-cent piece, or penny as we call it, costs almost four cents to make, at a loss of nearly three cents apiece. Since 2006, the U.S. Mint has lost money making pennies to the tune of billions of dollars. In 2024, the U.S. Mint manufactured 3,172,000 pennies at 3.7 cents each, resulting in a loss of $85 million.

In 2024, each five-cent nickel cost 13.8 cents to produce, resulting in a loss of 8.8 cents on all 202 million of the coins that were produced. This resulted in an $18 million loss for the U.S. Mint.

If we eliminate the penny, there will probably be more demand for nickels, so, over time, the losses to produce that coin will likely grow.