Yahoo News Robert Reich on the Hollywood Strikes, Tech “Leviathans” and a Second Gilded Age
While there are some uniquely Hollywood issues at the core of the SAG-AFTRA and Writers Guild of America strikes, they’re in many ways a reflection of broader economic issues in the U.S.
In a wide-ranging conversation about the strikes and the recent spotlight on C-suite pay in Hollywood, Robert Reich, former U.S. Secretary of Labor and co-founder of Inequality Media and the Economic Policy Institute, explained how the rise of monopolies and relative disappearance of unions has created market conditions primed to enhance economic disparity.
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“The real power with regard to the entertainment industry is in Apple, Amazon, Alphabet, Microsoft and Meta,” Reich explains. “These giant technology firms are moving into the entertainment space at a very rapid clip. The firms I just mentioned have a total capitalization of over $8 trillion. To put that in context, $8 trillion is more than the entire national products of every country in the world, except the United States and China. These are gigantic leviathans. That’s where the power is.”
Even as the WGA and Alliance of Motion Picture and Television Producers, which bargains on behalf of studios, seem poised to head back to the negotiating table just following the 100th day of the writers strike, many in Hollywood fear a resolution is still months away. (Or, as one industry rep put it, the “optimistic” view is the strikes ending in November.)
“If you really want to understand how the deck is stacked, or the game is rigged, it all stems from those power setters,” Reich says, adding that doesn’t mean the combined forces of SAG-AFTRA and WGA won’t be able to make considerable gains. “There will be contracts that come out of this that could conceivably alter how the winnings are split, but it’s not going to be easy.”
Reich spoke with The Hollywood Reporter about the underlying economic factors and market forces impacting the entertainment industry and the country at large.
How much of this is about the perception of importance [of the writers and actors and others who are creating content for these companies] and how effective are labor movements, and strikes, in shifting that perception?
We’ve seen a huge change in the face of American labor over the past 40, 50 years. In the 1950s over a third of all workers in the United States in the private sector were unionized. This is huge. That means even workers that are not unionized get the benefits of every union contract because their employers are afraid that if they don’t do the same thing as everybody else they’re going to be unionized next.
Today it’s 6 percent. We’re down to 6 percent of the workers in the private sector unionized, which basically means almost no power at all. In fact, a lot of young people today don’t even remember unions. They see old movies, Marlon Brando in On the Waterfront, or maybe they hear from their grandparents about unions. But the union movement for a lot of young people is not a living, breathing thing.
What we’re seeing, however, this year is a little bit of a revival of union thinking and union activism. The baristas in Starbucks, for example. It looks like the Teamsters just got a very important contract with UPS. Nobody predicted it. The UAW is now making noises suggesting that when its contract is over with the big three automakers there may be a strike. Teachers over the last couple of years have gone on wildcat strikes. We’re seeing something that used be pretty common in the United States and, again, with actors and with writers.
[The SAG and WGA strike] in 1960 was a big deal. It changed the way Hollywood operated, at least for a time. So, what has been the case in terms of power migrating upward to the very top, to these big monopolies, is not necessarily always going to be the case. I think people get fed up. They get angry. They get resentful. The public is now very pro-union even though they don’t really know much about unions, the young people included. I think there’s a lot of sympathy out in the hinterland to the actors and the writers and not very much sympathy to the big studios and the gigantic tech companies behind them.
How do you see this playing out?
I worry for the actors and the writers and how little they have in terms of their cushions going forward. I hope that people who care about the writers and the actors will contribute to the striker funds and that a lot of people who otherwise are very economically vulnerable can get through this. It could be a prolonged strike. There’s a lot of anger on both sides, from what I hear. As long as nobody’s being employed, at least actors and writers, the studios are raking it in even more. They don’t have to pay writers and actors. Artificial intelligence looms on the horizon. That is even scarier — and should be — to a lot of people who are creatives and who are content producers. That’s why the stakes are even higher this time around.
What are the broader implications here?
Overall, I think it’s important to understand that this is not simply Hollywood. This is not just a bunch of writers and actors against some studios. This is the entire American economy and the direction we are going in. This is gigantic high-tech firms that are monopolizing like mad, including the entertainment industry, including streaming videos and games and media platforms. They are mining consumer data and getting even larger. There’s gotta be changes in the law. We haven’t talked about this very much, but the reason that these giant firms can become monopolies, the reason that these monopolies can bestow these extraordinary salaries and pay packages on select CEOs and executives overall, the reason we see a structure of industry like this, is not because of some necessary market in the sky. Markets don’t exist in nature. This is because of how laws and rules have structured the market and made it very easy to monopolize and made it hard to unionize, and made it difficult for a lot of content providers to do well. So, hopefully out of all of this will come some change in the law that balances out what is now a very distorted system that gives more and more power to the monopolies and less and less power to individuals.
What would that change in the law look like?
Most likely it would make it much more difficult for the biggest players — and, again, I’m talking mostly about Amazon and Apple and Alphabet and Microsoft and Meta and Netflix and some of the other gigantic players — to become as large as and as powerful as they are. It would make it impossible for Microsoft, for example, to buy Activision Blizzard. It would set up guardrails. By the same token, it would provide some rules, in the case of actors and writers, with regard to residuals over streaming. It would give them more power at the bargaining table. It would make it easier for them to gain additional members, for example, and therefore [increase] their bargaining power.
Is there anything else we haven’t talked about that you think is especially important for people to keep in mind?
We are in an economy that closely resembles the Gilded Age of the late 19th and early 20th Century. We are in the Second Gilded Age. The problem with that first Gilded Age — as huge fortunes were concentrated in the hands of a few — was twofold. Number one, those fortunes corrupted democracy, leading people like U.S. Supreme Court Justice Louis Brandeis to say, “We can have democracy in this country or we can have great wealth concentrated in the hands of the few, but we can’t have both.” The second problem is that when you have so much wealth in the hands of a very few people, most of the rest don’t have enough money to buy all the goods and services that the economy can produce. That can lead to things like depressions, hence the Great Depression that started in 1929. So, we can’t simply sit back and assume this is normal or necessary or inevitable.
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