PHILADELPHIA — A surplus of coins caused in part by fewer cash purchases in the softening economy has led the U.S. Mint to begin layoffs.
Instead of 23 billion new pennies, nickels, dimes and quarters next year, mint officials now believe they’ll need only 15 billion, mint spokesman Michael White said Wednesday.
The drop in demand for new coins is staggering, said James Benfield, executive director of the Coin Coalition, a Washington lobbying group.
“What we’re seeing now is a mega-dip here,” Benfield said.
The mint has begun laying off 357 workers nationwide, mostly seasonal workers at the major coin-production plants in Philadelphia and Denver. Its other plants in San Francisco and West Point, N.Y., make commemorative coins and coins from gold, silver and platinum.
The San Francisco plant will lose 101 workers and the Philadelphia branch will lose 104 employees, White said. Most of the employees being laid off are seasonal or temporary workers.
Some have speculated that the coin glut is being compounded by many coins coming back into circulation after months or years on dresser tops and in shoe boxes. But a spokeswoman for Coinstar, a company that operates 9,300 coin-changing machines in supermarkets, said the company is not seeing an increase in usage of its machines.
The Coinstar machines, which count a shopper’s coins and exchange them for cash or groceries, took in $1.2 billion last year and are expected to take in the same amount this year, Coinstar spokeswoman Michelle Avila said.
For the mint, lower production means lower profits because it charges the Federal Reserve for the full face value of a coin, though it costs less to manufacture.
For example, it costs 4.5 cents to make a quarter, but the mint charges 25 cents, White said. A penny costs just under a cent to make; a nickel costs 3.16 cents; a dime costs 1.92 cents. The balance goes to the U.S. Treasury to pay for other government operations.
On the Net:
U.S. Mint: http://www.usmint.gov