Who needs Hollywood?

Those woe-is-us whiners keep insisting that the writers strike will practically destroy the local economy as we know it. A piece in today's Variety cites an "industry study conducted by informed sources" that lays out a most unhappy picture. I think we're now up to $18 trillion in local economic impact. Or is it $180 trillion? Anyway, things just ain't that bad; as I noted the other day, December's employment report shows little noticeable impact from the strike, despite the hyperbolic hand-wringing. In fact, the entertainment industry category actually increased by 800 jobs from November (and by 4,100 jobs from a year earlier). How does that jive with those “industry studies”?

Anyhow, my piece in the February Los Angeles magazine challenges the notion that Hollywood is an indispensable part of the local economy now being taken away by the strike. During the 1988 walkout, media reports had many of the same doom-and-gloom predictions, but a couple of months after an agreement had been reached, then- UCLA economist Larry Kimbell characterized the strike’s impact as “zilch.” Frankly, Hollywood’s importance is way oversold – always has been.

Here’s the main, blasphemous point: If a meteor suddenly knocked out L.A.’s traditional entertainment industry—we’re talking studios, talent agencies, special-eff ects houses, movie distributors, TV syndication, everything—the place would somehow survive (despite the prospect of fewer celebrity haunts and paparazzi). Its creative side extends well beyond Hollywood to fashion, architecture, toy design, and Web content, among many other industries. There are more creative jobs in L.A. than there are people in Pittsburgh, and only 37 percent of those jobs are in entertainment. That’s hardly what would be classified a “company town,” where most or all of the real estate, businesses, and utilities are owned by a single company. (Think Cass, West Virginia, founded more than 100 years ago for West Virginia Pulp and Paper.)

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Economists can’t even agree on how many people are in the entertainment industry. The LAEDC uses state employment numbers in estimating a workforce of 254,000 for movies and television production. But at the U.S. Bureau of Labor Statistics, the figure is only 113,000. Other organizations have other numbers. The truth is, no one knows. Unlike businesses in which it’s easier to keep abreast of employment rolls, inmuch of the entertainment industry is made up of independent contractors not on the payroll at any one company, and so they’re hard to track.

But there are other complications: Actors and production people often work nonentertainment jobs to make ends meet, and only some economists include ancillary job categories in determining the total workforce. Not having a reliable number means it’s almost impossible to measure Hollywood’s growth. If you believe the employment number cited by the LAEDC in 1988—70,000—then the Bureau of Labor Statistics estimate of 113,000 in 2006 represents modest growth. The 254,000 figure suggests substantial growth. Either way, it’s only a sliver of the county’s 4.1-million-person workforce.