Managers at small businesses located near studios are making tough decisions on staffing as the Hollywood writers’ strike enters its fifth week. In Burbank’s media district for instance, in the San Fernando Valley, restaurants, coffee shops, and dry cleaners rely heavily on customers from companies like Warner Bros. Studio, Disney and ABC, making them vulnerable to the sudden shutdown of writers’ rooms and productions.
The Writers Guild of America (WGA), the union behind the strike, says the current labor action is costing the local economy $30 million a day, an estimate they calculated by applying inflation to an analysis of the financial toll of the 2008 writers’ strike. That 100-day walkout cost the region $2 billion, according to the Los Angeles County Economic Development Corporation.
Like in 2008, this year’s strike is not just affecting writers. The various professions, from caterers to grips, that help run a film set are also not reporting to work, as some productions are halted and future ones postponed. Permits for film productions dropped 51% during the week of May 21 compared to the same period last year, according to Film LA, the nonprofit that handles permits for the City of LA and LA County.
At Olive and Thyme, a breakfast and lunch spot in Burbank, 60% of their business is takeout from studio office buildings nearby and local writers’ rooms. General manager Tyler Dow says during the first week of the strike, business continued as usual, and they even saw picketers stop by for food. Now, he says, customer traffic is down 25% and he’s reduced staff hours. “The word around the campfire is that a lot of the studios are giving the other folks around the business some time off,” says Dow.
The restaurant industry is still recovering from the pandemic and dealing with increased overhead due to inflation, says Dow, so the narrow margins are becoming narrower. “I'm actually having to staff a little lighter,” says Dow. “And I have a phone call today with the owner of the business talking about how we can reduce our staff to maintain our economic viability.”
Toluca Lake Dry Cleaners, three blocks from Olive and Thyme in Burbank, is also cutting staff hours as business drops. The studios and office buildings nearby provide 70% of Malian’s business. These days, he says, office workers are bringing in fewer items — say, four dress shirts instead of a dozen — and in casual conversation with customers, Malian learned that several productions are about to wrap, so he expects business to drop further.
Manager Tom Malian worries his employees might go looking elsewhere for employment in an industry not affected by the strike. “I can’t send these people home too many times because I don't want to lose them,” he says.
In some ways, the pandemic has prepared small businesses to be nimble in situations like this, says LA Chamber of Commerce President Maria Salinas. During the COVID-19 shutdowns, businesses learned to boost their online presence through social media, and thought carefully about the process of layoffs and rehiring, she says.
Salinas is concerned about the long-term economic fallout of the strike and expects a large toll on the local economy.
“That's the unfortunate piece,” says Salinas. “Because there's a lot of small businesses that rely on this [part of the] economy moving forward.”