As entertainment industry professionals return to negotiations on Wednesday, the protracted strikes from writers and actors have led to a devastating impact on the economy, surpassing a breathtaking $5 billion, economists note. This financial blow extends across multiple sectors, leaving a swath of destruction in its path.
In New York only, the interruption of eleven significant productions applying for the state’s tax credit program, has translated to an economic hit of $1.3 billion and a lost opportunity for 17,000 hires, according to Empire State Development.
Kevin Klowden, Chief Global Strategist at the Milken Institute, laments this financial trajectory to an estimated $6 billion in losses countrywide. Klowden points to a rise in the number of evictions and staffing cuts in hospitality businesses; the end of eviction moratoriums in California; and cutbacks in expenditures at production studios as significant repercussions of the ongoing strikes.
Cal State Northridge's Todd Holmes, Associate Professor of Entertainment Media Management, corroborates this grim fallout. The U.S. Bureau of Labor and Statistics recorded a loss of 34,800 jobs in movie and sound production industries between May and August. Holmes attributes much of the losses to the strikes and expects further fallout in ancillary roles such as makeup, catering, and custodial services that support productions. "The situation is getting progressively worse as the strikes continue," he lamenting.
The ripple effects of the strikes have trickled down to businesses adjacent to the entertainment industry. Pam Elyea, owner of the prop shop History for Hire, knows this all too well. Her business, which caters to TV productions, movies, commercials, and music videos, has had to halve its workforce due to dwindling demand.
Elyea's once bustling warehouse fell eerily silent, forcing the shop owner to shift the remaining staff to California's workshare program. Under this arrangement, they work reduced hours, draw partial unemployment benefits, and keep their health insurance.
The strikes' ongoing nature deeply disturbs Elyea, who has been in business for four decades. "It's a constant source of worry, particularly as the layoffs don’t just translate to loss of jobs. In a city as expensive as Los Angeles, losing your job might mean losing your home," she agonizingly pointed out.
In the face of prolonged negotiations, two Los Angeles County supervisors plan to file a motion to establish a business interruption fund that will cushion county businesses reeling under the impact of these strikes.
