COMP NEWS – The California Economy has lost an estimate $3 billion due to the work stoppage from the WGA strike, according to one economist.
The first 100 days of the Hollywood writers’ strike has cost the California economy $3 billion, a Cal State Northridge professor says.
Todd Holmes, a professor of entertainment industry management at the San Fernando Valley school, further warned that if the strikes last until October, which would be a record for the industry, the economic cost could reach $5 billion, CNBC reported.
The estimates are based on an analysis from the 2007 Writers Guild of America strike. The Milken Institute think tank determined the last strike cost the state 37,700 jobs and sucked $2.1 billion from the state’s economy, the report explained.
Holmes built off of that $2.1 billion and adjusted it for inflation and other factors to come up with his ballpark on the impact the current strikes have had so far.
The actual figure is likely higher, the report said, because the Screen Actors Guild-American Federation of Television and Radio Artists joined the WGA on the picket lines in July, which did not happen during the last walkout.
The report notes that Los Angeles has a much higher than average proportion of income flowing from the entertainment industry, making a work stoppage in that industry all the more impactful for the California economy.
The report notes that almost 20% of personal income in the Los Angeles area is earned by people with entertainment jobs or entertainment-adjacent roles. “The economic impact is even bigger because average compensation in the industry is considerably higher,” Lee Ohanian, a UCLA economics professor told the outlet.
If those high-earners stop spending, especially on big-ticket items like cars, that has a ripple effect across the economy.
California could see an exodus of low-wage earners if the strike continues. The report said about 700,000 people are employed in entertainment jobs, or close to 5% of the California workforce.
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