Starving actors are a national treasure! I mean, employed striking actors. What I'm trying to say is I will not let some computer-generated image put Robert DeNero out of work.
Jobless Benefits for Susan Sarandon
California moves to pay Hollywood actors and other union workers when they go on strike.
By The Editorial Board, WSJ
Aug. 27, 2023 4:18 pm ET
Actor Susan Sarandon joins the picket line with the Writer Guild of America and SAG-AFSTRA in New York City, Aug. 17.
To what extent does Big Labor control the Legislature in Sacramento? Consider that during the final days of the legislative session, Democrats are trying to jam through a bill to extend unemployment benefits to Hollywood actors and screenwriters as well as other workers who go on strike.
Democratic Senators introduced a bill last week that would allow striking workers to receive unemployment benefits after two weeks. Federal law requires that workers be “able to work, available to work, and actively seek work” to qualify for jobless benefits, which on average replace about 45% of weekly wages in California.
But striking workers have jobs. They choose not to work to increase their leverage in contract talks. Unions typically pay striking workers small sums from a strike fund that is financed with member dues.
U.S. labor law since the Taft-Hartley Act of 1947 has been aimed at creating a level playing field for unions and management to make their case to workers. But Democrats are now seeking to put their thumb on the bargaining scale by extending unemployment benefits for up to 26 weeks to workers on the picket lines. This is a bargaining-table subsidy for actors like Susan Sarandon and Paul Dano. Unions could also direct more member dues to political campaigns instead of strike funds.
New York and New Jersey are the only other states that provide jobless benefits to striking workers. The legality of this union welfare hasn’t been reviewed in court. But California businesses would likely have legal standing to sue since they would have to pick up the cost.
Unemployment benefits are funded by payroll taxes that vary by employer. Those that have laid off more workers pay higher taxes. California’s unemployment insurance fund is still $18 billion in the red from the pandemic. The state borrowed $20 billion from the feds to pay benefits as unemployment spiked and then slowly receded following prolonged lockdowns.
California could have repaid the federal loan from its $100 billion surplus last year, but Democrats spent the money on welfare and green subsidies. Now the state is paying interest on the federal loans from its general fund to the tune of $300 million a year. Employers are also assessed a surtax that increases each year until the loan is repaid. The surtax will raise about $900 million next year.
At this rate it could take decades for the state to repay its federal loan, especially since its debt continues to grow as joblessness remains elevated. According to the U.S. Labor Department, California’s insured unemployment rate is nearly twice the national average. This year benefit payments will exceed state payroll tax contributions by $1.1 billion.
As the state Legislative Analyst’s Office explained last month, “historically, benefit payments have only exceeded contributions during major economic downturns—most recently, during the pandemic and Great Recession. For the first time, the fund is expected to be out of balance during a period of job growth.” The shortfall could balloon if there’s a recession.
Extending unemployment benefits to striking workers would add to the fund deficit and result in higher taxes on businesses. That may be part of the plan. The bill’s sponsor said he hoped the bill would spur discussions in the Legislature to raise taxes on business “to make sure that the fund is solvent.”
If Sacramento wants to give Hollywood producers and other employers even more incentive to use artificial intelligence to replace workers, here it is.
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