Labor shortage threatens New Orleans movie industry

New Orleans CityBusiness, Mar 12, 2007 by Richard A. Webster

Wanted: Experienced, Louisiana-based film industry electricians, carpenters, grips and mechanics.

In 2006 the Louisiana movie industry grew through another successful year but a worker shortage threatens to derail momentum.

Alex Schott, executive director of the Governor's Office of Film & Television Development, said the first question asked by most Hollywood executives is: "What's your capacity to handle X number of projects at any time?"

A Louisiana Economic Development report on the film industry released last week found numbers are well below what's needed despite "dramatic" growth in the last few years.

"The next logical steps would be to create training programs for ... below-the-line labor" such as electricians and carpenters," according to the report.

Mike McHugh, a business agent with the International Alliance of Theatrical Stage Employees Local 478, the union representing motion picture studio mechanics in Louisiana and southern Mississippi, said a class to train film carpenters and painters was scheduled to begin Jan. 15. But the city pulled the plug when funding fell through one week before the start date.

Local 478 has 500 members but needs to at least double in size to meet demand, McHugh said.

"I'm at the point where frustrated is an understatement. It's approaching livid. I'm so sick of the mayor's office. It's time to start naming them and shaming them because they aren't doing shit about anything," McHugh said.

Ernest Collins, director of marketing for New Orleans, said the class fell through because teachers weren't in place, the facility to hold the class was uncertain and the course failed to meet federal funding guidelines.

"If we didn't get it past the goal line, you can't point fingers at any entity. We just didn't get it done. That's all," said Collins.

Limited work force

Under the Louisiana film tax incentive program, studios receive 25 percent tax credits for in-state spending, which means they lose money for every worker hired out of state.

The goal of every studio is to hire all residents. But the local work force has only enough laborers to meet 20 percent of the need for big-budget films and 75 percent for smaller budget pictures, said Schott.

McHugh thought he found a solution seven months ago when the city agreed to fund a carpenters and painters class using more than $100,000 in federal funds from the Workforce Investment Act.

However, Workforce Investment Act dollars can only be used to fund classes if students are assured permanent employment upon completion of the course. Because film industry jobs are temporary - studios hire workers on a project-by-project basis - classes were ineligible to receive federal dollars.

McHugh questions why the city agreed to use WIA dollars to fund his class seven months ago when it "damn well knew this," and why the city was able to use the same funding for an electrical and grip class prior to Katrina.

"There are jobs waiting but meanwhile people from Texas and Georgia are coming to take the jobs. And you have to let them because the show must go on. But what's that doing for Louisiana?" McHugh said.

Collins said the city never promised McHugh the funding was in place and the class was a go. The city was able to use Workplace Investment dollars for the pre-Katrina classes by lining students up with a constant stream of temporary jobs that gave the appearance of permanent work. They weren't able to duplicate those efforts this time around, Collins said.

Big-budget finale

Despite the labor trouble, the state film industry continues to prosper. Nineteen films will be shot in the first half of the year with a combined production value of $500 million. The second half of the year should bring five to 10 more projects, Schott said.

In 2006, studios shot 21 films with a combined budget value of $450 million. According to Louisiana Economic Development, the film industry created 13,445 jobs in 2005 compared with 5,437 in 2003. Film spending added $7.4 million to the state economy in 2003 compared with $344 million in 2005.

Between 2001 and 2005, wages paid to film industry workers increased nearly 200 percent from $30 million to $89 million.

In 2001, the year the state created the tax incentive program, only two low-budget films were shot in Louisiana - productions that cost no more than $20 million - and no big-budget films. In 2006, 21 low-budget films and five big- budget features were shot.

The era of big-budget movies in Louisiana likely came to an end in 2006 with changes to the tax incentive program, Schott said. Under the current system, tax breaks are only given for dollars spent in Louisiana. Prior to the change tax breaks were given for the total budget of the film, regardless of where producers spent their money.

As a result, the tax incentives become more attractive to smaller films trying to save money by spending most of their budgets in region where they're shooting. Big-budget films don't have that concern and farm out much of their work out of state, losing out under the current tax incentive system.