NCPA - National Center for Policy Analysis

Entertainment Strikes Los Angeles

September 19, 2001

The television and motion picture industries are a major economic force in California, and especially Los Angeles, say economists. Both industries are highly unionized, and subject to costly strikes. Strikes are highly effective since California is not a right-to-work state, meaning union membership is mandatory for most industry workers.

On May 1, 2001, for instance, the Writer's Guild of America negotiated a new contract with the Alliance of Motion Picture and Television Producers preventing a costly strike. The Screen Writers' Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA) are other unions that could potentially strike. The costs of these strikes would be substantial to the Los Angeles and California economies, tax revenues and employment.

For Los Angeles, economists estimated the effects of a prolonged strike by both SAG and AFTRA, if they occurred in 2001:

  • Directly cost as many as 81,900 jobs, raising the L.A. unemployment rate from 4.8 to 6.9 in the third quarter of 2001.
  • Yield an income loss of $4.4 billion in the third quarter of 2001.
  • Lead to a $54.5 million loss of tax revenue.

A three-month strike by SAG/AFTRA strike would yield 54,600 job losses and a $2.9 billion loss in income. Even a one month strike by the two actors' unions would reduce employment in L.A. by as many as 21,700 jobs resulting in a potential income loss of $1.2 billion in the third quarter of 2001.

The results for California as a whole would be similarly expensive. Economists estimate that California would suffer a loss of nearly 100,000 jobs and $6.1 billion in income during the third quarter.

Source: Ross C. DeVol, et al., "The Impact of an Entertainment Industry Strike on the Los Angeles Economy," Milken Institute, June 2001.

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