Let’s Fix the Penny Problem With a Reagan Nickel
Last year, the U.S. Mint produced 3.2 billion pennies. With production costs at 3.69 cents per penny, that means the government spent over $118 million making $32 million worth of coins.
Enter Donald Trump, who recently announced he wants to save money and end penny production. That sounds great, except for one minor problem. When pennies disappear, experts are telling us more nickels will be needed. And nickels are an even bigger money pit than pennies. But fret not—I have an idea that could save the country $100 million a year.
The nickel problem
Last year, the U.S. Mint cranked out 112.8 million nickels—at a cost of 13.78 cents per coin. Since a nickel is only worth five cents, each one produced represents a net loss of 8.78 cents. That’s nearly a $10 million loss just on nickels in 2024.
But it could get worse. Some people say that when pennies go away, 30–40% of transactions will require nickels instead. In other words, if we do away with the 3.2 billion pennies annually, we could need anywhere from 960 million to 1.28 billion more nickels each year.
At a cost of 8.78 cents to manufacture a nickel, that would wipe out any savings from eliminating pennies—and could even cost us an extra $27 million annually. In other words, rather than saving money, we’d just be trading one money-losing coin for another, more expensive one.
Personally, I doubt this concern comes to pass. If the USA follows the lead of other countries that have done away with their lowest-value coins, there probably won’t be a huge need for more nickels. When Australia, New Zealand, the Netherlands, and Canada ditched their lowest-value coins, people adjusted quickly. Companies simply rounded up or rounded down when using cash and it balanced out. Electronic transactions continued to be processed to the exact cent, and thus rounding was applied only to cash transactions.
Additionally, the percentage of cash transactions is going down (20% of all transactions in 2021, 16% in 2023).
That said, nickels are still super expensive to make, so here in America, why don’t we rethink our nickel situation, too?
Enter the Reagan nickel
A newly designed nickel would significantly reduce the cost of coin production and therefore might save the country about $100 million annually. Instead of perpetuating the current production of expensive nickels, what if the U.S. Mint redesigned the nickel entirely?
Currently, nickels are large and thick, made of 75% copper and 25% nickel. Not cheap.
Pennies are smaller and thinner, made of 97.5 zinc (VERY inexpensive) with a 2.5% copper plating.
A new nickel could be designed that is larger than our current penny but smaller than the current nickel. Not only would this reduce the amount of metal needed, we could also change the metallic composition. Similar to the cost-cutting move for pennies in 1982, nickels could be made of 97.5% zinc with a 2.5% nickel plating (to prevent wear), thus significantly reducing costs.
The numbers have been crunched! Smaller nickels could be made for 5.61 cents each instead of the current 13.68 cents. The cost to Americans? Only 0.61 cents per nickel instead of 8.68 cents.
Don’t want to reduce the size of the nickel? I get it. Laundromats, parking meters, and vending machines are set up to take a certain size of coin, and changing all those would be a pain. But a blended zinc/nickel five-cent piece that’s the same size as our current nickel would cost only 8.25 cents instead of what we’re paying now: 13.68 cents. That’s a 40% savings.
President Trump says he wants to drop the penny. That’s fine with me. But if we’re going to change things, let’s change things. As much as I like honoring Thomas Jefferson, a new nickel could be called the Reagan nickel, thus honoring the president whose economic policies created phenomenal economic growth in this country during the last part of the last century.
We can shrink the nickel or keep it the same size. We can honor Reagan or keep Jefferson. But this much is true: if we create a zinc/nickel-plated five-cent piece, we could save our country anywhere from $60 to $100 million annually.
Let’s keep going with fiscal responsibility
As I said, I’m fine with halting penny production, but I say a new nickel is a win for fiscal responsibility. And since that phrase seems to be the trend in Washington these days, let’s get Congress to work with the Treasury and the U.S. Mint to make it happen. Saving the taxpayers $60 to $100 million annually would be worth it.
PS. Someone let President Trump or Elon know about this so they can press for it. My fee for this idea is simply a new car for my wife. Maybe Elon can find a way to make that happen.
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Daniel Bobinski, Th.D., is an international bestselling author (Creating Passion-Driven Teams), a certified behavioral analyst, and for 36 years he’s been a corporate trainer and executive coach. He also serves as Executive Trainer for the Shofar Global Network, which advocates for business leaders to let God guide their businesses, thus directing people’s attention to the Author and Finisher of our faith. After all, even if we all become wealthy, what does it matter if our souls are going to Hell?