Note to actors: Writers may never recover

Labor strikes burn through serious cash

The recent Hollywood writers' strike tipped California into a recession, resulting in a loss of $2.1 billion to the state economy and costing 37,700 jobs, the Milken Institute said in a research report. The report, issued by the economic think tank on Thursday, takes on increasing importance as the Screen Actors Guild and Hollywood's major movie studios are embroiled in their own contract talks that threaten to throw the industry into another work stoppage as soon as the SAG contract expires on June 30.

"The biggest thing that (a potential SAG strike) really does is it slows down the recovery, even a short strike is going to lead to a further disruption of filming schedules," said Kevin Klowden, managing economist at the Milken Institute and one of the report's authors.

Klowden said the three-month writers' strike that ended in February cost the entertainment industry alone $500 million. But because Hollywood overlaps with other state industries, the report found the strike had a wider impact overall.

Some 10,500 members of the Writers Guild of America walked off the job in November last year after failing to strike a new contract with major film and television studios represented by the Alliance of Motion Picture and Television Producers.

Key sticking points in those talks centered on how much writers would be paid when their work appeared on the Internet. Web-related payments also are an important hurdle to overcome in the current talks between SAG, which represents about 120,000 film and TV actors, and the AMPTP.

Klowden said the writers strike came at a very bad time for California because the United states was teetering on the edge of a recession.

"The fact is that for California this was essentially a tipping point that pushed us (the state) into a recession," Klowden said.

Jack Kyser, chief economist with the Los Angeles County Economic Development Corp., said the Milken report compares well to the $2.5 billion regional damage estimate his organization reported earlier this year when movie and television workers returned to work.

"It is very realistic, because these are high-wage people," Kyser said.


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