This live episode of Odd Lots focuses on the economic impact of the summer strikes by Hollywood writers and actors. The discussion covers the effect on the film and television industry, jobless claims, wages in various professions, inflation statistics adjustments, and the potential catalysts for decreasing wage pressures. It also explores the impact of concert tours and promotes an upcoming show and event sponsored by IBM.
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Quick takeaways
The recent strikes in the entertainment industry have had a noticeable impact on industry employment numbers, with job losses observed in the motion picture and video industry.
Historically, strikes tend to follow inflationary periods and can be influenced by external factors like price shocks, but their long-term impact on inflation remains uncertain.
Deep dives
Impact of Strikes on Economic Data
The recent strikes in the entertainment industry, such as the writers and actors strikes, have started to show up in economic data. Work stoppages among writers and actors have been recorded, with an increasing number of individuals participating in strikes. However, the impact on unemployment rates has been limited. This is because many actors work part-time and have other jobs that prevent them from being counted as unemployed. Additionally, the economic impact of strikes can be seen in industry employment numbers, with job losses observed in the motion picture and video industry. Overall, the strikes have had a noticeable effect on the entertainment industry, but their exact influence on the broader economy is still unfolding.
Inflationary Impact of Strikes
Historically, strike activity tends to follow inflationary periods rather than directly causing inflation. Strikes often occur after price shocks, such as those caused by external factors like COVID, which lead to increased strike activity due to perceived wage disparities. However, the long-term impact on inflation from post-strike pay raises is typically limited. Currently, the ongoing strikes in the entertainment industry, as well as the auto sector, may contribute to inflationary pressures, particularly given the supply chain challenges faced by the auto industry. But the overall impact on inflation remains uncertain.
Wage Dynamics in the Entertainment Industry
The wage dynamics in the entertainment industry, particularly for actors, might be surprising to many. While top actors make substantial incomes, the median wage for actors is relatively low, with wages below $17 per hour. Furthermore, there is minimal variation in wages for actors across the spectrum, indicating significant challenges for most actors to earn higher incomes. Additionally, many actors work part-time and in other occupations, such as bartenders or real estate agents, where wages are also relatively low. These wage dynamics highlight the economic realities faced by the majority of actors in the industry.
Potential Impact and Future Contagion
The strikes in the entertainment industry, while having an impact within the industry itself, may not significantly affect the broader economy. They could lead to a shift in spending as consumers redirect their entertainment-related expenses to other sectors. However, the strikes could also have economic implications for local areas heavily reliant on the entertainment industry, such as Los Angeles. The success of these strikes may encourage other unions in different sectors to push for better wages and working conditions. However, the magnitude of future strike activity and its potential impact on the economy remains uncertain.
This special episode of Odd Lots was recorded live at the Bloomberg Screentime festival earlier this month in Los Angeles, where the summer strikes by Hollywood writers and actors were a hot topic among panelists and guests. During the event, we spoke with Omair Sharif, the founder and president of Inflation Insights, on how prolonged work stoppages in the film and television industry have impacted the economy, both in California and across the country, and what the recent rise in labor actions means for the US overall.