The dual strikes of the Writers Guild of America and Screen Actors Guild are taking a toll on the California economy.
Together, they have cost the state about $3 billion, according to an analysis from California State University-Northridge Assistant Professor Todd Holmes.
Holmes’ estimate is based on a Milken Institute report on the economic effects of the WGA’s 2007-2008 strike, which lasted 100 days and cost the California economy $2.1 billion along with 37,700 jobs. Adjusted for inflation, today “that figure would be at least $3 billion and perhaps even more because of SAG joining the picket lines last month,” Holmes told Spectrum News.
As of Wednesday, the WGA’s 11,500 members had been on strike 100 days. Negotiations with the Alliance of Motion Picture and Television Producers broke down May 1 over the writers’ demands for higher residuals from streaming media, mandatory staffing levels and guarantees that artificial intelligence won’t be used to replace them.
Last week, the WGA and AMPTP agreed to meet, but the talks didn’t result in an end to the stalemate. On Thursday, the WGA told its members it planned to resume negotiations with the studios again Friday, following a request from AMPTP president Carol Lombardini.
“We expect the AMPTP to provide responses to WGA proposals,” the union said in its email. “Our committee returns to the bargaining table ready to make a fair deal, knowing the unified WGA membership stands behind us and buoyed by the ongoing support of our union allies.”
SAG’s 160,000 members joined the writers in their strike against the AMPTP July 13. Similar to the WGA, the actors are demanding higher residual payments from streaming companies that are based on a show’s success and restrictions on the use of artificial intelligence.
On Thursday, SAG President Fran Drescher issued a statement reiterating what she said when the strike was first called last month.
“We are living in a historic hour, as we fight to achieve a seminal contract, the likes of which we haven’t seen in over 60 years,” Drescher wrote on the SAG-AFTRA strike web site. “It was 1960 when we last went on strike alongside the WGA and achieved pension and health plans and residuals. Our futures depend on not accepting anything less transformative in this negotiation.”
Holmes said the $3 billion hit to the California economy over the past 100 days includes the lost incomes from halted television and movie productions, as well as revenue losses from tangential businesses such as restaurants, caterers, florists, prop houses and professional drivers who service the major studios. About 20% of the Los Angeles economy involves people who work directly or indirectly for the entertainment industry, Holmes said.
The $3 billion in losses so far could easily balloon if the strikes continue to the end of the year, as many analysts predict.
“If we get into October, you’re at $4 billion, and if it were to go all the way to January, then it’s probably in the neighborhood of $6 billion or more, which would be relatively devastating,” Holmes said.
California’s gross domestic product was $3.1 trillion in 2022, making it the 5th largest economy in the world if it were its own country. Of that, Hollywood generates about $226 billion in annual sales, according to a 2020 report from the Motion Picture Association based on data from the U.S. Bureau of Labor Statistics.