Annual IIA analysis also highlights and quantifies average potential savings from using broadband at $12,000/yr per American household
WASHINGTON, D.C., Dec. 12, 2017 (GLOBE NEWSWIRE) -- The Internet Innovation Alliance (IIA) finds that the average American household can now save more than $12,000 per year on household spending through use of high-speed internet services, according to its latest Cost Campaign analysis. IIA’s new supplemental whitepaper, “The Multiplier Effect of Broadband and the Income of American Households,” also examines how broadband helps generate income for Americans, particularly via the sharing economy.
IIA’s annual study – authored in partnership with Nicholas J. Delgado, Founder and Chairman of Dignitas – found significant consumer savings for those who take advantage of online offerings, virtual marketplaces, internet tools and mobile applications for web-exclusive discounts and effective comparison shopping. Specifically, the study estimates $12,019.63 in total savings after the average annual costs of a mobile data plan and a home broadband connection ($1,200) are subtracted.
The study calculates internet-enabled savings across 10 different categories based on data from the Bureau of Labor Statistics’ annual Consumer Expenditure Survey.1 Last year, average household income before taxes totaled $74,664 – a significant 7.2% jump from 2015 – while average annual expenditures per household was $57,311, representing a 2.4% increase from 2015 levels.
Drawing from the Bureau of Labor Statistics’ Survey, IIA’s analysis identifies the possible yearly savings of a typical American family on necessities like housing, food and clothing; basics including entertainment, gasoline and health insurance; and everyday services like bill pay and news, through opportunities only available via the internet.
1 https://www.bls.gov/news.release/cesan.nr0.htm
The following savings are based on average spending in each category for the typical U.S. household, according to the Bureau of Labor Statistics.
Top 10: Potential Internet-Enabled Savings on an Annual Basis
| Category | Average Spent (Annually)* | Average Saved Due to Broadband (Annually) | % Savings | |||
| Entertainment | $ | 6,067.00 | $ | 3,996.33 | 65.87 | % |
| Health Insurance | $ | 3,160.00 | $ | 474.00 | 15.00 | % |
| Housing | $ | 15,686.00 | $ | 3,267.39 | 20.83 | % |
| Food | $ | 4,049.00 | $ | 608.16 | 15.02 | % |
| Apparel | $ | 1,803.00 | $ | 1,325.75 | 73.53 | % |
| Automotive | $33,666.00*** | $3,106.00***** | 9.23 | % | ||
| Newspapers | $248.58** | $ | 128.04 | 51.51 | % | |
| Gasoline | $ | 1,909.00 | $ | 219.34 | 11.49 | % |
| Non-Prescription Drugs | $338.00**** | $ | 55.13 | 16.31 | % | |
| Bill Pay | $39.48** | $ | 39.48 | 100.00 | % | |
* Average spent annually, according to the Department of Labor Consumer Expenditure Survey
** Average spent annually, according to IIA calculations
*** Average transaction price for a vehicle, according to Kelley Blue Book (one-time spending)
**** Average spent annually, according to IRI
***** One-time savings
Compared to last year’s financial analysis, the greatest increases in savings opportunities appeared in the Apparel (73.53% in 2016, compared to 44.84% in 2015) and Gasoline (11.49% in 2016, versus 2.05% in 2015) categories.
“Not only can you save money using broadband, you can make money using broadband,” said IIA Co-Chair Bruce Mehlman. “High-speed internet is an essential 21st century tool that enables people to supplement their income to improve their quality of life. Lawmakers and regulators should support policies that promote the expansion and availability of high-speed broadband internet to help close the digital and economic divide.”
This year, IIA also examined income generation through the use of broadband, particularly via the sharing economy. The whitepaper explores the four categories below:
- Sharing assets (e.g., Uber, Airbnb, WeWork)
- Selling products (e.g., eBay, Etsy, Poshmark)
- Selling services (e.g., TaskRabbit, Fiverr, InSight Telepsychiatry)
- Sharing content (e.g., YouTube, Twitch, TWiT)
Relying on an analysis conducted by Earnest, IIA demonstrates how much people typically earn on side-gig platforms including Airbnb, TaskRabbit, Lyft, Uber, Doordash, Postmates, Etsy, Fiverr, and Getaround. IIA’s whitepaper also provides the mean broadband return on investment (ROI) in the gig economy, based on the average monthly sharing economy income per worker across platforms ($299/mo x 12 months = $3,588/yr) and the average annual cost of a mobile data plan and home broadband connection ($1,200):
($3,588 ÷ $1,200) x 100 = 299%
As calculated by IIA, below is the average broadband ROI of workers with the companies cited by Earnest:
| Company | Broadband ROI for Average Sharing Economy Worker | |
| Airbnb | 924 | % |
| TaskRabbit | 380 | % |
| Lyft | 377 | % |
| Uber | 364 | % |
| Doordash | 229 | % |
| Postmates | 174 | % |
| Etsy | 151 | % |
| Fiverr | 103 | % |
| Getaround | 98 | % |
| OVERALL | 299 | % |
Additionally, the Alliance’s report makes clear that – based on the average expenditures per consumer unit for 2016 ($57,311) – the typical gig economy worker can cover 6.26% of household spending with the earnings (before taxes) from their broadband-enabled side-job:
($3,588 ÷ $57,311) x 100 = 6.26%
“A decade ago, the gig economy didn’t even exist – today, about a third of Americans are workers in this new sector,” commented Delgado. “The livelihoods of many people now depend on broadband. Others are utilizing it to make ends meet and cover household spending, as well as pay off debt, beef up savings, and invest.”
For more information on the study’s sources, methodology and a “Top 10 Ways Being Online Saves You Money” infographic that can be added to a website or blog, go to https://internetinnovation.org/special-reports/savings/. To read IIA’s whitepaper, “The Multiplier Effect of Broadband and the Income of American Households,” visit https://internetinnovation.org/special-reports/multiplier-effect-broadband-income-american-households.
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About The Internet Innovation Alliance
The Internet Innovation Alliance was founded in 2004 and is a broad-based coalition supporting broadband availability and access for all Americans, including underserved and rural communities. It aims to ensure every American, regardless of race, income or geography, has access to this critical tool. The IIA seeks to promote public policies that leverage the power of entrepreneurs and the market to achieve universal broadband availability and adoption.