U.S. News

Hollywood Strike Might Take $4 Billion Out of US Economy

By Mara Lafontaine · July 27, 2023

Kevin Klowden, Chief Global Strategist at the Milken Institute, warned that the ongoing double strike in the entertainment industry could result in a $4 billion hit to the US economy. 

The Writers Guild of America (WGA) has been on strike since May 2nd, and the Screen Actor’s Guild (SAG/AFTRA) has been on strike since July 14th. Both unions are striking for fair pay amid rapid technological and financial change within the industry. 

The unions’ concerns seem to havestruck a sympathetic note with both the public and industry experts. Reportedly, only 12.7% of actors earn above the $26,470-per-year threshold to qualify for health insurance through SAG. Disney chief Bob Iger, who makes somewhere between $74k and $84k per day, didn’t help things when he asserted, from the so-called “Summer Camp for Billionaires” at Sun Valley, Idaho, that the unions’ demands are not realistic.

Klowden told Yahoo Finance the $4 billion estimated impact of the double strike is roughly twice the loss from the writers’ strike in 2007, which primarily affected California. The current strike, he said, is having a much wider effect. “It’s not just impacting these industries in California, but it’s really doing so in New York. It’s doing it in Atlanta. It’s doing it in Albuquerque. It’s doing it in Pittsburgh. It’s doing it in all sorts of places where filming actually takes place,” Klowden explained, noting the strike will also hit a wide range of related industries, such as food and hospitality. 

“We looked at it, and we talked to people, and it was affecting restaurants, and catering companies. It’s affecting trucking companies. It is affecting welders. It was affecting construction people. It was affecting dry cleaners… all sorts of businesses in hospitality and otherwise,” said Klowden.

Meanwhile, Snoop Dogg canceled a Hollywood Bowl performance in support of the strike, and there was a rally in NYC with actors, including Steve Buscemi, Christian Slater, and Christine Baranski, giving speeches calling for fairness and camaraderie to cheering crowds. These links provide a look at what the actors are asking for and what the writers are asking for. 

Klowden believes the studios and the creative forces will eventually find common ground, but “right now, it doesn’t seem like either side is ready to. The studios think that they can outlast the writers and the actors because they’ll undergo economic pressures. They’ll have rent payments, mortgage payments, basic utilities, cost of life issues. And the actors and the writers think the studios are going to run into issues with content. And it really depends for each of them who will be under the biggest amount of pressure.”

According to Moody’s, the one business that will surely suffer from the strike is movie theaters.