by Al Sacco

Giving Cell Phones to Low-Income Households Could Create $11B in Jobs, Study Finds

Mar 28, 20083 mins
Consumer ElectronicsIT LeadershipMobile

Mobile phones help Americans secure jobs, earn money and protect themselves in emergency situations, according to new research that argues giving cell phones to low-income families could create billions in improved wages.

Providing cell phones to some 17,000,000 of the United States’ poorest households without such devices could help bread-earners find new work and generate as much as $11 billion in wages, as well as boost those families’ overall safety, according to a new study.

Related Stories

In-Stat: Worldwide Smartphone Market to Grow More Than 30 Percent Each Year Through 2012

Mobile Broadband Usage Up 154 Percent in 2007

Apple Tops Motorola, Microsoft in Global Smartphone Sales; Nokia, RIM Still Market Leaders

Hands-Free Cell Phone Use in Cars Not Much Protection

The Cell Phones Provide Significant Economic Gains for Low-Income American Households study, by author and Massachusetts Institute of Technology (MIT) Research Fellow Nicholas P. Sullivan, was released this week by the New Millennium Research Council (NMRC) think tank. It is based on the findings of two separate surveys: a random telephone poll of 1,005 U.S. residents 18 years or older, conducted by Opinion Research Corporation (ORC); and an e-mail survey of more than 110,000 prepaid TracFone mobile customers. Both surveys were conducted in the fall of 2007.

The ORC survey found that all Americans who employed cell phones to find new employment or to make additional money in 2007 made an average of $748.50 that could be directly attributed to the use of their mobile devices. Of the 45.2 million U.S. households that bring in less than $35,000 a year–of which 38 percent, or 17,176,000 do not have mobile phones–the average amount of cash earned that could be directly attributed to the use of mobile phones was more than $200 less than the overall average, at $530, according to the study. If those households without mobile phones were able to earn money at the same rate as cell-phone-owning families after obtaining a cell phone, household income would increase by an estimated $2.9 billion, Sullivan says.

Based on data from the survey of TracFone users, where 30 percent of working participants claimed monetary gain in 2007 from cell phone user, the average annual gain attributed to mobile phones was much larger, at $2,361. Using this number, non cell-phone using household with yearly income of $35,000 or less, that could earn at the same rate, could make up to $11.1 billion more were they to acquire mobile phones, according to Sullivan. So potential income gains for low-income American households without cell phones would be between $2.9 billion and $11.1 billion, the study found.

“The cell phone is particularly important to blue-collar, minority, less-educated and low-income segments of Americans, even though those groups are far less likely to own cell phones,” Sullivan said, in a release. The study is meant to show the benefits of stepping up state and federal Lifeline or Link-up programs, which provide affordable phones service to income-eligible consumers.

Additional noteworthy study findings include:

  • The majority of every major demographic U.S. segment thinks mobile phones are “extremely important” for “emergency use” and would take a cell phone over a landline during an emergency or a crime.

  • Fifty-eight percent of Americans would pick a cell phone if they had to choose between a landline or mobile

  • Forty-eight percent of Americans have placed a mobile phone call or send a text message during an emergency; 20 percent have received an emergency cell phone call or text; and 32 percent have purchased a mobile phone for a loved one in case of emergency

  • Thirty-seven percent of Americans without cell phones are older/retired; 29 percent have a high school educate or less; and 30 percent are unemployed.