The Globalization Horror Picture Show

[Robert Weissman <rob@essential.org>]

The Globalization Horror Picture Show
by Russell Mokhiber and Robert Weissman

A rebellion is brewing in Hollywood -- not on screen, but behind the
scenes.

The Screen Actors Guild, the Directors Guild of America and other
entertainment industry unions are protesting against "runaway" production
of film and television production. 

Since 1990, the proportion of U.S.-developed films and television
productions produced outside of the United States has soared by nearly 100
percent, according to a study commissioned by the Directors Guild of
America and the Screen Actors Guild. According to the study, conducted by
the Monitor Company, a management consultant firm, the number of "economic
runaways" -- production located outside of the United States for
financial, not creative, reasons -- rose from 100 in 1990 to 285 in 1998.

The vast majority -- 85 percent -- of the out-of-U.S. productions located
to Canada, with most of the rest going to Australia or the UK. Productions
are migrating to Canada for a simple reason: lower costs. The Canadian
dollar has plummeted in value as against the U.S. dollar in 1990s. Wage
rates have risen at a slower pace than in the United States. And the
Canadian federal and provincial governments offer major tax subsidies to
film and TV productions. Overall costs are 25 percent less in Canada than
in the United States.

To many workers in Hollywood, especially camera people, grips and various
production workers, as well as lower tier actors and directors (supporting
actors, stunt people, associate directors and others) the Canadian shift
has become a serious jobs issue. If a film is shot in British Columbia
instead of Hollywood, Tom Cruise does not lose a job. But his stunt man
may find himself replaced. 

>From the Canadian perspective, of course, things look quite different. To
those in the Canadian industry, the "runaway" productions are bringing
jobs, in a relatively high-paying, low-polluting industry.

What makes this point of view particularly compelling is the overrunning
of Canadian media in the last couple decades by the U.S.-based
multinational media giants. 

Less than 1 percent of English-speaking screen time in Canada is devoted
to Canadian film productions, says Garry Neil, a Canadian consultant on
cultural policy issues. Pressure from the Motion Picture Association of
America has stymied Canadian attempts to adopt domestic movie distribution
regulations designed to build up Canadian counterparts to the Hollywood
studios, and thus to develop an institutional means of support for
Canadian productions.

When Canada tried to foster space for its domestic periodicals against
U.S. competitors, the United States took the issue to the World Trade
Organization and forced revocation of the Canadian magazine protections.
(Canada had sought to ban "split run" publications -- those produced for
the U.S. market and then sold in Canada with the same copy but
Canada-specific ads. The fear was that Canadian publications, sold in a
market approximately one-tenth the size of the United States, would be
unable to compete with U.S. publications that could cover editorial costs
from the much larger U.S. market.)

Efforts to promote Canadian cable channels, including a Canadian country
music station, have foundered in the face of the economic clout of U.S.
media companies.

In this context, it is hard to blame the Canadians for offering tax breaks
and aggressively courting the U.S. movie and TV show makers. If they
cannot nurture their own industry, why not lure the U.S. firms to locate
production in Canada?

But the rank-and-file U.S. film industry workers are also right to
perceive a threat to their livelihoods. 

Right now, the U.S. unions are responding to the "runaway" problem by
campaigning for federal and California tax breaks designed to offset the
Canadian tax subsidies. They say these should be "wage-based" tax credits,
but there is no getting around the fact that the benefits will accrue to
the big production studios.

We are thus in the middle of a race to the bottom in tax giveaways, a
zero-sum game in which the only ultimate winner will be Warner Brothers,
Disney, Fox, Sony and the other giant media companies.

"The fact is," says Rafe Greenley of the Screen Actors Guild, "in a global
economy, the one thing that can move [most] easily is" TV and film
production. There are no factories to relocate, no heavy equipment to
move. 

Even cultural production, supposedly one of the great strengths of the
U.S. economy, turns out to be prone to the destructive dynamics of
corporate-driven globalization.

Unless public outrage forces a rewrite of the script, this is story set to
have an unhappy ending, with the bad guys laughing all the way to the
bank.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor. They are co-authors of Corporate Predators: The
Hunt for Megaprofits and the Attack On Democracy (Monroe, Maine: Common
Courage Press, 1999, http://www.corporatepredators.org).

(c) Russell Mokhiber and Robert Weissman

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