The High Price of Frustration: Americans Lose $165 Billion to the Annoyance Economy
New York, Thursday, 19 February 2026.
Corporations are monetizing your frustration. A new analysis reveals that intentionally difficult cancellation processes and administrative friction cost Americans $165 billion annually, while boosting corporate revenue streams by up to 200%.
Quantifying the Cost of Friction
According to a report released by the Groundwork Collaborative in February 2026, this “annoyance economy” is not merely a nuisance but a significant drag on household finances [1][4]. The $165 billion figure—which researchers describe as a “tip-of-the-iceberg” estimate—encompasses the tangible costs of junk fees and the monetized value of time wasted navigating deliberately complex corporate bureaucracies [4]. To put this financial burden into perspective, the total cost to American families is greater than the Gross Domestic Product (GDP) of 14 U.S. states [3]. This economic drag is comprised of various sectors, with junk fees for services such as concerts, hotels, and food deliveries accounting for over $90 billion annually [1]. This segment alone represents approximately 54.545% of the total estimated cost of the annoyance economy.
The Profitability of Obstruction
The financial incentive for corporations to maintain these barriers is substantial. Data indicates that implementing difficult-to-cancel subscription models can increase specific corporate revenue streams by more than 200% [1]. Alex Jacquez, the Chief of Policy and Advocacy at the Groundwork Collaborative, notes that the economy is becoming “increasingly subscriptionalized,” a trend where companies rely on inertia and administrative friction to retain customers [1]. This strategy relies heavily on the “tax on time” imposed on consumers; for instance, the time Americans spend on the phone with customer service has increased by 60% over the last 20 years [1]. Furthermore, in 2024, customer service satisfaction scores plummeted to record lows, with 74% of consumers reporting problems, a rate double that observed in 1976 [1].
Systemic Inefficiencies and Solutions
Beyond entertainment and retail, the healthcare sector is a major contributor to this economic friction. Americans lose over $21.6 billion annually in wasted time solely due to administrative hassles within the healthcare system [1]. Approximately 80% of the population reports frustration regarding the paperwork and coordination required for insurance and medical appointments [1]. In response to these systemic issues, Neale Mahoney and the Groundwork Collaborative have proposed a playbook for policymakers that includes creating a “Health Care Sludge Unit” to root out needless friction and legislation to make companies financially liable for wasting consumer time [3][4]. While some organizations like Netflix and the California DMV have voluntarily reduced friction to improve efficiency and satisfaction, experts argue that legislation is often necessary to counter the perverse incentives that make wasting customers’ time profitable [3].