The entertainment industry, long considered the heartbeat of Los Angeles, is weathering a storm unlike any in recent memory. Once a magnet for creative talent and a powerhouse for the local economy, Hollywood now finds itself grappling with a sharp decline in production, mass job losses, and a host of structural challenges that threaten to reshape the city’s identity. According to both the Wall Street Journal and Nova News, the number of film and television industry workers in Los Angeles County plummeted to approximately 100,000 by the end of 2024—a staggering drop from 142,000 just two years prior.
The numbers tell a sobering story. Film and television productions with budgets greater than $40 million fell by nearly 30 percent in 2024 compared to 2022, and the first three quarters of 2025 saw an additional 13 percent decline. The ripple effects are widespread: fewer productions mean less work for set builders, caterers, and countless local businesses that once thrived on the industry’s steady rhythm. As the Wall Street Journal notes, studio employment in Los Angeles has now reached its lowest point since 1995, with the exception of the pandemic years.
Why has Hollywood’s engine sputtered so dramatically? The reasons are as complex as a blockbuster script. Industry insiders and critics alike point to a convergence of factors—some economic, others political, and still others technological.
One major culprit is the high cost of doing business in Los Angeles. Industry veterans lament that the city’s expenses—from union labor and energy prices to taxes and housing—have become prohibitive, especially when compared to states like Georgia or even international competitors like British Columbia. As Nova News reports, the region’s state tax incentives simply can’t match those offered elsewhere. Producers argue that current measures, such as federal and state tax credits for domestic productions, don’t go far enough. "Current incentives don't cover key costs, such as star salaries, and aren't enough to bring major productions back to Los Angeles," one producer emphasized, echoing a widespread sentiment in the industry.
The impact on the broader economy has been profound. The unemployment rate in Los Angeles County now stands at 5.7 percent, higher than both the California state average of 5.5 percent and the national average of 4.3 percent. Job growth remains anemic, and the city’s famed creative sector is feeling the pinch. As the Wall Street Journal observed, “If you don’t count the pandemic, Los Angeles is suffering its worst production activity drought in 30 years.”
But the crisis doesn’t end with the studios. The city’s ongoing housing shortage, exacerbated by last winter’s wildfires in Altadena and the Pacific Palisades, has deepened job insecurity for many industry workers. The fires destroyed neighborhoods where numerous production staff lived, further tightening the housing market. The result? Many professionals are packing their bags and leaving Los Angeles altogether. Since 2020, the county’s population has shrunk by nearly 250,000—a migration that’s both a symptom and a cause of the city’s economic woes.
For some, the roots of the crisis run even deeper. In a sharply worded critique, John Nolte of Breitbart lays blame at the feet of what he describes as “decades of unfettered political leftism.” According to Nolte, the studios’ decision to pump billions into streaming content failed to pay off because “almost all of that content was poisoned with social justice, woketardery, gay stuff, grooming, obnoxious girl-bosses, and smug, humorless heroes.” He argues that this political and social content alienated half the country and drove subscribers away from streaming platforms, contributing to the industry’s financial woes.
Nolte’s perspective doesn’t stop there. He points to union labor costs and strict regulations as factors making Los Angeles less competitive. “The unions ensure that union crews are prohibitively expensive, especially compared to places like Georgia and overseas,” he writes. High energy costs, taxes, and the expense of living in a Democrat-run city, he contends, have all contributed to the decline. He also criticizes California’s approach to environmental management, claiming that “California puts trees, plants, and animals above people. They don’t maintain their forests.” The result, he says, is a cycle where wildfires worsen the housing crisis and make it even harder for industry workers to remain in the city.
Of course, not everyone shares Nolte’s diagnosis. Many producers and industry advocates point instead to the structural shifts in the global entertainment landscape. The rise of streaming services created a content arms race, but as the market matured, studios realized that not every show or movie could attract enough subscribers to justify soaring production budgets. As Nova News highlights, the rapid advancement of artificial intelligence is another looming threat, with experts warning that many animation and special effects jobs could soon be rendered obsolete.
“There’s a fear that people are pivoting permanently from professionally made content to the endless buffet of YouTube and social media,” the Wall Street Journal noted. This shift in audience behavior is forcing studios to rethink their strategies, with some insiders warning that the recovery could take years—if it happens at all.
Meanwhile, the exodus from Los Angeles continues. The city that once attracted dreamers from around the world is now seeing its creative class depart in droves. “Los Angeles County’s population has dropped by a quarter million in five years, and those are undoubtedly the Normal People who paid the taxes and kept up their homes,” Nolte asserts, reflecting a broader anxiety about the city’s future.
Policy makers are not blind to the crisis. Proposals for more robust tax credits and incentives are circulating at both the state and federal levels, but as Nova News reports, industry leaders remain skeptical about their effectiveness. The current incentives, they argue, simply aren’t enough to reverse the tide.
As Hollywood grapples with these challenges, the stakes couldn’t be higher. The industry’s struggles are more than just a local story—they’re a bellwether for the future of American entertainment and the economic health of one of the country’s most iconic cities. Whether Los Angeles can reclaim its place at the center of the creative universe remains an open question, but one thing is clear: the city’s golden age is under threat, and the path forward will require more than just star power and red carpets.
For now, the city waits—hoping for a comeback, but bracing for whatever comes next.
