What the Summer of Strikes Means For The Broader Economy

SPEAKER_1 (0:00)

Hello, Odd Lots listeners, producer Carmen here. This episode was recorded on October 12th at the Screen Time Conference in California, and before the UAW reached a tentative agreement with Ford to end their strike.

Thanks for listening.

Joe Weisenthal (0:23)

Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.

Tracy Alloway (0:28)

And I'm Tracy Alloway.

Joe Weisenthal (0:29)

You are going to be listening to a special episode of the Odd Lots podcast that we recorded live at the Bloomberg Screen Time Conference in Los Angeles in early October.

Tracy Alloway (0:41)

That's right, Odd Lots takes Hollywood. We are speaking to one of our favorites, Omair Sharif of Inflation Insights. And we are talking to him about the macro impact of some of the recent strikes we've seen this summer from the Screenwriters Guild, from the Actors Guild, as well as the United Auto Workers. Take a listen.

Joe Weisenthal (1:01)

Omair is one of our favorite economists that we speak to regularly on our podcast, where we typically cover like markets, finance and economic stuff.

Tracy Alloway (1:09)

That's right. And today we're going to try to join the two worlds of entertainment and Hollywood with more of the macro economic stuff that we do on a day-to-day basis.

Joe Weisenthal (1:19)

Right, so obviously one of the big macro stories here is the ongoing strikes.

We got the news last night, the actors are continuing to strikes, despite the fact that maybe it was expected to wrap up sooner.

There's also more strike activity nationally. We also found out yesterday, Ford expanding its strikes. So we're going to try to balance out the two stories, talk about what we've learned so far from the economic impact here locally in LA and Southern California, and what that might say for the rest of the country.

Tracy Alloway (1:47)

Yeah, let's do it.

Joe Weisenthal (1:48)

Omair, thank you so much for coming here and making the time and chatting with us.

Omair Sharif (1:52)

Yeah, nice to be back again.

Joe Weisenthal (1:53)

So let's just start with a basic question, which is the two strikes, one just wrapped up. Is it showing up yet in economic data?

Omair Sharif (2:01)

Yeah, so we have some national reports we can look at that show some of the impact of at least the writer strike. There's some data out there right now in terms of work stoppages. So any strike that's more than a thousand people gets recorded by the government.

And some of that data started to show that about 11,500 writers were on strike beginning in the June number. So we have seen over the months and we've now started to see that impact in the same work stoppages report, for example, showing 160,000 actors on strike as well. And of course it records a whole lot of other strikes as well. So that's probably the main place where we see it. We haven't really seen it quite as much in terms of unemployment just yet. And there's a few reasons for that. I mean, you can imagine, especially with the actor strike, you know, actors also tend to work other jobs, right? There's very few full-time actors.

And so if they're working other jobs and they're making money, they won't be counted as unemployed. And in fact, in one of the surveys, the household survey, depending on how you answer the question about, you know, whether you have a job, were you at your job, are you available to work, there's sort of a list of questions you have to answer. And in order to be counted as unemployed, you sort of have to hit all three of these questions perfectly. So unless people answer it in a certain manner, they will not be counted as being unemployed. The one area also within the household survey where you do see the impact is, you know, the number of people who have a job, but who are not at work due to a labor dispute. So that is a very, very specific category that they do capture in the BLS. And that is starting to show some of the impact right now. But, you know, more broadly, we haven't really seen a big increase, for example, in jobless claims.

We haven't seen a huge move higher in the unemployment rate data itself, whether that's nationally or even really within LA or California.

Tracy Alloway (3:47)

Wait, can I ask a very basic question? Maybe it's a stupid question, but what does the literature tell us about whether strike action is inflationary or deflationary? Because I could see you, you could possibly argue it both ways. So if it impacts output, then maybe prices go up because supply of a given thing is in shortage.