The Impact of Hollywood Strikes on the US Economy
On September 27th 2023, after 148 days, the Writers Guild of America (WGA) reached an agreement with the Alliance of Motion Picture and Television Producers (AMPTP) to end the second longest strike in Hollywood history. With the Screen Actors Guild (SAG-AFTRA) resuming talks and expected to end their strike soon, things seem to be on the rise for our nation’s entertainment capital. However, these strikes have created major setbacks and continue to negatively impact the economy. It’s been 15 years since the last writers strike, which lasted three months and is conservatively estimated to have cost $2.1 Billion. With changes in production costs and technology, it’s difficult to estimate a number this time around but experts predict it is already over $3 billion. The widespread impacts of the entertainment industry have been a driving factor in the immense economic effect; for example property rentals, costume shops and catering services are a few businesses that heavily rely on the entertainment industry. Some stores have even gone out of business and many are standing on their last legs. As very few productions have been worked on since the strikes began, the entire supply chain of Hollywood has suffered. WGA began strikes on May 2, mainly contingent on higher pay, specifically residuals, and solutions towards artificial intelligence. With mainstream titles shifting to streaming networks, writers received significantly less in residuals compared to cable streaming. In an example regarding the television show Abbot Elementary, writers would make $700 from streaming residuals compared to $13,500 from cable. Moreover, writers protested the use of “mini rooms” which is a process that has writers collaborate in an unorthodox, uncontracted nature, which led to many writers, even highly experienced ones, to get paid the bare minimum. Solving these conflicts was paramount towards an agreement being put in place. In the simplified memorandum of agreement (MOA) released by the WGA, it is apparent that the WGA was successful in securing their desires. Minimum wages along with pension and health funds rates have been increased, improvements were made to contract terms for length of employment and size of writing groups, and residuals, specifically regarding streaming, were improved. Steps have been put in place to combat the growth of artificial intelligence, prohibiting the use of software to reduce or eliminate writers and their pay. Writers are now satisfied to come back to work but there are a lot of steps in place to make sure that the industry stays afloat. SAG-AFTRA remains on strike so many productions are still in delay. Lateral sectors of the industry desperately need mass-scale entertainment production to return quickly in order to reconcile the financial burden of the past months. Major companies recognize this as well, as the longer they delay projects, the harder it becomes to ensure a financial return. Although it should always be the priority of the great creative minds of this nation to feel like they are being fairly compensated, a plan must be instilled to make certain the industry does not burden any more significant loss. If productions continue to be delayed, a government intervention might be needed to allow businesses to survive.