Hispanic Broadband Access: Making the Most of the Mobile, Connected Future

As the U.S. develops a national broadband strategy, much is at stake for American consumers, our country’s economy, as well as future innovation and its many social benefits. Complex issues from infrastructure deployment to digital literacy to consumer-friendly tax reform all play into U.S. efforts to close the digital divide and usher in a new era of innovation and opportunity. Equally important to ensuring these benefits are shared throughout our society is a deeper understanding of the unique needs, challenges and connected behavior of diverse Americans.

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This paper explores the broadband behavior, challenges and opportunities of the nation’s 48 million Hispanics. A better understanding of this community and its connectivity—increasingly defined by a strong preference for mobile broadband access—can help shape a successful national broadband strategy that spurs substantial new opportunities at the intersection of broadband, mobility and the Hispanic community. 

Key Findings

• While Hispanics trail other U.S. populations in overall Internet access, they are among the most avid users of mobile broadband. In fact, Hispanics and African Americans lead mobile broadband use (53% and 58% respectively), with both communities far ahead of Whites (33%).

• Hispanics are more mobile than the general U.S. population and, thus, rely more on cell phones. In fact, compared to Americans generally, Hispanics account for more minutes used and for a higher percentage of cell-phone ownership despite their relatively low incomes.

• Given that roughly 40% of U.S. Hispanics are born abroad, in countries where wireless service often is more common than landline phones, the American Hispanic community is more open to mobile broadband than many other population groups. This familiarity makes the leap to smartphones and other connected mobile devices a more intuitive step for many than turning to wired, home broadband adoption and computer usage.

• In 2008, Hispanics outpaced the general population in accessing and downloading digital media (music, video, audio, movies, television programs, video games and podcasts), 42% to 35%

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Hispanics and Retirement: Challenges and Opportunities

Hispanics in the United States face an especially standard of living throughout their retirement. This is due to several factors. On average, Hispanics in the U.S. today have lower levels of educational attainment, less earning power, and a lower level of savings than non-Hispanics.

Hispanics in the United States are less likely than non-Hispanics to have an employer sponsored retirement plan, which puts them at a disadvantage for accumulating retirement income. In addition, many Hispanics work in service jobs or small businesses that do not provide retirement plan options to their employees. Compounding these trends is the fact that many Hispanics in America today lack the financial literacy necessary for sound retirement planning.


Although Hispanics share a common language, they are a diverse group with distinct cultures and unique circumstances. Hispanics represent a wide range of educational attainment, occupations and income levels. Many families can trace their heritage to the continental United States, while others are recent immigrants with limited work experience and a lack of savings or access to retirement savings vehicles. All of these factors greatly impact how effectively Hispanics are able to provide for their retirement needs.

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Trickle-Up Wealth Transfer: Cross Subsidization in the Payment Card Market

 Since merchants charge consumers the same price regardless of payment method, the existence of payment card rewards programs implies that some customers subsidize the consumption of others. We surveyed a cross-section of U.S. consumers and asked about spending on groceries and gasoline, payment methods, and card rewards. From our data, we estimate the total amount transferred in the U.S. due to rewards on gasoline and groceries to be about $1.4b to $1.9b... 

 

In examining the actual distribution of rewards, we find that higher income consumers received a higher rewards rate. Using gasoline merchant operating statement data, we find that card costs are passed through to the consumer. Therefore, rewards amount to transfers—transfers from low income to high income consumers which have a disproportionate impact on low-income minorities, a sort of regressive tax on consumption. We discuss several policy remedies. 

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