Breaking news

Freed: Cheick Diallo finally cleared by NCAA updated 9 minutes ago

Archive for Thursday, November 22, 2001

U.S. Mint cuts jobs as consumers dip into penny jars

November 22, 2001


— A surplus of coins, perhaps compounded by Americans emptying their change jars in the softening economy, has prompted the 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.

The mint had already made too many coins during the past year.

The mint has begun laying off 357 workers nationwide, including major coin-production plants in Philadelphia and Denver.

"This all happened fairly rapidly," U.S. Mint spokeswoman Susan Valaskovic said.

The drop in demand for new coins is staggering, said James Benfield, executive director of the Coin Coalition, a Washington lobbying group that supports the dollar coin.

Tens of millions of dollars worth of coins are unexpectedly back in circulation after months or years on dresser tops and in shoe boxes, Benfield said.

"As the economy slows down, this stuff comes out of the closet," he said. "When you're out of a job, you cash in all your coins."

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 machines count a shopper's coins and exchange them minus a service charge for cash or groceries. Coinstar estimated that Americans have $7.7 billion in spare change at their homes.

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 1/2 cents to make a quarter, but the mint charges 25 cents.

The mint sends the balance to the U.S. Treasury to pay for other government operations. But when demand drops, the mint has to cut costs just like a private company, leading to layoffs.

The agency which also has operations in San Francisco, West Point, N.Y., and Washington, D.C. plans to get rid of about 12 percent of its 2,861 employees.

Commenting has been disabled for this item.