Hollywood’s strikes have cost California’s economy $3 billion, says a professor.

Hollywood's strikes have cost California's economy $3 billion, says a professor.

Hollywood Strikes Deal a $3 Billion Blow to California’s Economy

In a dramatic turn of events, Hollywood has recently experienced a double strike, dealing a significant blow to California’s economy. It is estimated that these strikes have cost the state a staggering $3 billion over the last 100 days. This revelation comes from Todd Holmes, an entertainment industry expert and academic, who shared his insights with CNBC Make It.

The 2007 writers’ strike had a similar impact on Los Angeles, resulting in a $2.1 billion hit to California’s already struggling economy, as reported by the Milken Institute. This time, however, the situation is compounded by the fact that both the Writers Guild of America and the actors’ union SAG-AFTRA have simultaneously raced to the picket line. This is the first time since 1960 that such a double strike has taken place.

The primary grievances voiced by these unions revolve around their lack of income from streaming platforms and concerns about the threat of artificial intelligence replacing their jobs. As technology advances, the entertainment industry is witnessing the rise of AI algorithms capable of generating scripts, highlighting the need for actors and writers to secure fair compensation for their creative contributions.

To estimate the economic impact of these strikes, Todd Holmes, an entertainment industry professor at Cal State Northridge, conducted economic analysis based on the 2007 writers’ strike. His estimation reveals a potentially devastating blow to California’s economy. With no signs of resolution in sight, Holmes predicts that the strikes could cost California between $4 to $5 billion if they continue until October.

While the effects of these strikes are undoubtedly felt within the entertainment industry, their repercussions extend far beyond the realm of actors and writers. Small businesses that depend on the industry, such as local restaurants, catering companies, construction workers, and dry cleaners, are also feeling the pinch. These businesses rely heavily on the bustling activity generated by the entertainment industry, making the strikes particularly challenging for them. As Holmes points out, “A lot of different people are impacted surrounding the industry,” stressing the immense hardship these strikes cause for various individuals and sectors.

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The contrast between the negative impact of the strikes on California’s economy and the positive effect Hollywood has had on the overall US economy is worth noting. Blockbuster movies, such as “Barbie” and “Oppenheimer,” have historically had a significant impact on the economy, generating revenue and attracting audiences worldwide. However, the ongoing strikes may overshadow these positive contributions and further exacerbate the economic strain on California in the coming months.

In conclusion, Hollywood’s double strikes have dealt a crippling $3 billion blow to California’s economy. The unique circumstances of these strikes, with both writers and actors protesting simultaneously, raise concerns about fair compensation and the advent of AI technology in the entertainment industry. While the primary focus is on the impact on the industry professionals themselves, it is crucial to recognize the wider repercussions felt by small businesses and individuals who rely on the industry’s success. The long-term economic consequences for California remain uncertain, making it even more critical to find a resolution that addresses the concerns of these unions while ensuring a sustainable future for the entertainment industry as a whole.

• California
• hollywood