The TV and film writers’ strike carried out by the Writers Guild of America and the Alliance of Motion Picture and Television Producers amid a failure to reach an agreement on a new contract is likely to have cost the California economy at least $3 billion so far, Cal State Northridge professor of entertainment industry management , Todd Holmes states.
The estimates provided by Holmes are based on economic analysis from the last Writers Guild of America strike that started in 2007. That strike led to 37,700 job losses and a $2.1 billion blow to the California economy, according to the Milken Institute. “A lot of different people are impacted surrounding the industry,” Holmes told CNBC.“and it’s causing them a lot of hardship.”
Holmes used the $2.1 billion figure and adjusted it for inflation and other factors to come to a new strike-induced loss of upwards of $3 billion for the state of California today. It’s likely to be even higher now accounting for the additional members of the Screen Actors Guild-American Federation of Television and Radio Artists, the union which represents various performers, joining picket lines in July. The industry employs over 1.7 million people outside that state, and pays them $158 billion a year in wages. California could see an exodus of low-wage earners if the strike continues. According to the report, the state's workforce is made up of 700,000 people employed in entertainment jobs, close to 5%.
Holmes further warned that if the strikes last until October, which would be a record for the industry, the economic cost could reach $5 billion, CNBC reported. The estimates are based on an analysis from the 2007 Writers Guild of America strike. The Milken Institute think tank determined the last strike cost the state 37,700 jobs and sucked $2.1 billion from the state’s economy, the report explained. The figure estimating the economic impact takes into account a much wider range of economic activity than just the pay for writers, actors and others involved in the actual production of films and television series.
The report notes that almost 20% of personal income in the Los Angeles area is earned by people with entertainment jobs or entertainment-adjacent roles. If those high-earners stop spending, especially on big-ticket items like cars, that has an impact across the economy. “The economic impact is even bigger because average compensation in the industry is considerably higher,” Lee Ohanian, a UCLA economics professor told the outlet.
