As the Hollywood writers’ strike drags on for a second month, small businesses in Los Angeles and beyond are struggling to cope with economic downturn it has caused in the region.
The Writer’s Guild of America (WGA), which represents 11,500 screenwriters, began the strike in early May, demanding higher minimum pay, greater benefits contributions, better residuals, and the regulation of material produced by artificial intelligence. Central to their demands is the claim that writer pay is declining, but Variety reported in April that this is dubious, noting that “since 1995, the average writer is doing about the same,” earning around $260,000 on average.
However, for the caterers and florists, the prop people and costume designers, work stoppages are highly damaging. Many of them survived the Covid-19 pandemic only to be thrown into economic uncertainty shortly thereafter.
“Even though there is a strike going on, it doesn’t stop my staff’s rent. It certainly doesn’t stop my rent. It doesn’t stop our utilities,” Pam Elyea told Reuters of her small business providing props to productions. “Things are just so much more expensive since the pandemic.”
Elyea said she is $100,000 short of meeting monthly expenses and estimated her revenues have fallen 60 percent.
No new talks are scheduled between the Hollywood studios and the union and the situation could be further exacerbated by actors’ union SAG-AFTRA going on strike.
According to the WGA itself, the current labor action is costing the local economy $30 million a day, calculated by adjusting the economic toll of the 2007-2008 writers’ strike to inflation, which cost the region a total of $2.1 billion in lost output. The strike lasted 100 days.
The Los Angeles Times reported earlier this week that very few permits have been issued for scripted TV series filming on location in the L.A. region in the last few weeks. The nonprofit FilmLA told the newspaper that there would normally be dozens of scripted television projects.
“We are hearing from some folks that they are really struggling and not sure how long they can hold out,” Paul Audley, FilmLA president, said on the effect to local businesses.
The businesses affected are not only those that directly provide services to the film and TV industry. Restaurants and dry cleaners are seeing less customer traffic and are having to reduce hours for staff. Creative solutions like diversifying operations can only take these businesses so far.
Even if the strike comes to a swift resolution, there would be a production lag for small businesses to contend with. “The writers aren’t going to hand in a dozen scripts a day after the strike ends,” said Sanjay Sharma, a professor at USC Marshall School of Business, to the Times. “You could be talking about a production lag of at least 30 to 60 days following the strike.”
Elyea, the propwoman, noted that she has had to curb purchases as the strike continues. She told Reuters she had to turn down a striking writer who wanted to sell her vintage electronics.
“You’re the reason I can’t buy from you,” said Elyea to the writer. “We’re all inter-related.”