Expensive cents
An Arizona congressman proposes retiring the penny today, but his state stands to benefit from the move. And many consumers are fearful that it would lead to higher prices. Alex Cohen reports.
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TESS VIGELAND: Y’know all those pennies collecting dust in glass jars? Well you might want to cash them in soon. The penny now costs 1.4 cents to produce, so today Congressman Jim Kolbe of Arizona will propose to rid of it. Alex Cohen has more.
ALEX COHEN: Though pennies are coated in copper, zinc accounts for nearly 98 percent of each coin. And the price of zinc has soared in recent years due to increased demand from China and India.
Mark Weller of the group Americans for Common Cents says its research indicates most consumers want to keep the penny and are fearful of what rounding to the nearest nickel may lead to.
MARK WELLER: Almost 80 percent are concerned that merchants would increase prices to compensate for losses due to rounding.
Weller’s group is funded in part by the zinc industry.
At the same time, Kolbe, the congressman behind the anti-penny legislation, represents a state rich in copper. That metal is the main ingredient of the nickel – which stands to increase in circulation if the penny is retired.
I’m Alex Cohen for Marketplace.