The halt in production has created a knock-on effect for companies that support the movie industry
The ongoing strike by script writers and actors in Hollywood has cost the California economy some $5 billion, the Financial Times reported on Saturday, citing a study by the Milken Institute, a local think tank.
According to the report, the strike, which prompted a shutdown of most Hollywood productions, has sent ripple effects across a large number of local businesses that support the movie-making industry, including caterers, dry cleaners, drivers, rental companies, and others.
“All these different people who provide support services that make productions happen – they’re getting nailed,” Kevin Klowden, chief global strategist at the Milken Institute, said in the report. He noted that the situation is also affecting the local job market.
“The jobs for average people in Hollywood – not the stars but the average people – have always been viewed as great middle class jobs. When that’s disrupted, the ripple effect on LA is more broad.”
Klowden warned that when the strikes end, the region’s recovery will be “not nearly as fast as you would think,” as many workers and businesses affected by the strikes may choose to relocate elsewhere and will not be available when productions resume.
The labor action began with the Hollywood’s writers’ union, the Writers’ Guild of America, which went on strike on May 2. In mid-July, it was joined by the actors’ union, the Screen Actors Guild-American Federation of Television and Radio Artists, thus resulting in the first simultaneous strike of actors and writers in Hollywood in 63 years.
Both unions are demanding higher pay, increased royalties, and formalization of the role of artificial intelligence in the motion-picture industry.
The latest round of discussions between the unions and studio heads, who are represented by the Alliance of Motion Picture and Television Producers, was held in late August. However, the sides failed to come to terms on a number of issues and the strike continued. Earlier this week, California’s state treasurer, Fiona Ma, sent an “urgent appeal” to studio heads to return to the negotiation table and work out a deal, noting that the strikes threatened “the stability and value of retiree investments” in the state.
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