More than three months after the Writers Guild of America’s strike, Hollywood is facing a new round of labor negotiations that, should they fail, could spell another potentially long strike for the city (and California as a whole).  As the Screen Actors Guild (SAG) and The American Federation of Television and Radio Artists (AFTRA) negotiate with AMPTP (the Alliance of Motion Picture and Television Producers), the state is still trying to right itself after the WGA shutdown last November.

Anyone who watches television can clearly see the surface effects of the WGA strike – everything from shows cancelled outright, to production schedules that have been pushed back by months – some even until next year (film production also suffered, but that was mostly in rushed scripts and a lack of rewrites on set).  But in order to appreciate the full magnitude of the three months of work-stoppage, one has to dig deeper, specifically into the economic impact the strike has had on all forms of industry-related professions, and on the state’s fiscal health in general.  A report by the Milken Institute, an independent economic think tank, details the numerous ways in which the strike has had (and will continue to have) a lingering effect.  The information contained in this report is all a result of the strike, and shows the roll it played in harming the already struggling state and local economies.

“Substantial”.  This is the word the report uses to describe the strike’s effect on Los Angeles and California, specifically in job loss and overall economic health.  “The state is projected to show a total loss of 37,700 jobs and $2.1 billion in lost output from the fourth quarter of 2007 through the end of 2008. Total personal income and total wages and salaries are projected to decline by $3.1 billion and $2.3 billion, respectively.”  All of these figures, attributable to the strike.  What’s most amazing about these facts is the vast reach of the strike, hitting not just actors and writers and everyone involved in production (hair and makeup artists, lighting technicians, camera operators, set designers, etc.), but also those peripheral to the industry, such as caterers and hotel staff.  The rippling effect of so many people having to tighten their belts has even caused finance, insurance, construction, and health-care to suffer.

According to the report, the strike was one of many factors that helped push California into a recession this year.  As a result, the strike “will continue to resonate over time, causing direct impact on employment, output, and wages and salaries, in turn affecting retail sales and causing ripples through other industries.”  There are also other lingering concerns, for instance a decline in television viewership; people had three months to kill, after all, and ended up turning to alternate sources of entertainment.  Bringing these viewers back into the fold is imperative, for the studios as well as for the advertisers who provide their revenue; however, as mentioned above, television executives are still having difficulties arranging their schedules to bring them back to normal levels.  Until they do, advertisers will remain wary.

This is just a basic overview on the negative effects the strike has had on our economy.  The good news, however, is that “[these effects] will gradually diminish over time; by the beginning of 2009, its effect on most industries will finally drop to a barely noticeable level.”  Unfortunately, this will happen only if SAG and AFTRA can settle their differences and coordinate their negotiations with AMPTP; otherwise, their current contract will expire today, and the unions may call a strike.  If that happens, the impact of the WGA strike will not be replaced, it will in fact be magnified.  We will then be faced with two distinct work-stoppages in less than a year, a frightening prospect for a state that thrives on the entertainment industry flowing smoothly.

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