Hollywood Strike II: even more bitter

This could have been Hollywood's golden summer. After years of falling income at the box office, the major film studios have released a raft of movies - Pixar's magnificent animated Wall-E, the fourth Indiana Jones, the action bloodfest Wanted with Angelina Jolie - that have brought people back to the cinema in droves.

And Hollywood is anticipating what the film trade paper Variety likes to describe as a "boffo" opening for Hancock, the new CGI-laden film starring Will Smith, which is expected to take $110 million this weekend. There has even been a hit movie - Sex in The City - for that perennially ignored demographic, middle-aged women.

So why has an apocalyptic gloom settled over Hollywood?

"I wasn't in Saigon before its fall or Berlin before the Nazi clampdown," Variety editor Peter Bart hyper-ventilated recently with the kind of myopic narcissism that is de rigeur here, "but I wonder if those cities were gripped by a similar sense of helplessness that afflicts Hollywood this week."

Hollywood is grimly waiting to find out if film and television production will be shut down for the second time in a year. A four-month strike by Hollywood writers that ended in February is estimated to have resulted in $2.3bn in lost wages and put more than 37,000 people out of work. Now it's the actors who may strike, after their three-year contract with the studios and TV networks came to an end this week.

Although the Screen Actors Guild (SAG), the main union representing actors, has not issued a strike call, a de facto strike has already brought much film production to a halt, with the studios wrapping up most shoots before the SAG contract ended on Monday.

At issue is the same thing the writers fought for - higher payments when their work is shown on new media. Every cent counts. While a few top actors can earn millions of dollars a movie, the vast majority of actors cannot even make a living from it and have to work as waiters and security guards to make ends meet.

The day rate for a jobbing actor with a speaking role in a TV series is $759. SAG estimates that fewer than five per cent of its members get enough days work a year to make a basic living acting, between $50,000 and $100,000 a year. These are categorised as 'middle class' actors and SAG estimates that their average earnings, adjusted for inflation, fell 16 per cent to $52,000 a year between 2001 and 2007 - partly because the big name actors were getting a larger slice of the pie.

Writers were remarkably united during their strike, but the actors, who are represented by two unions, are showing increasing signs of disunity. "Civil war", the Los Angeles Times called it, "pitting actor against actor". SAG, with around 120,000 members, represents actors on bigger film and TV productions, while AFTRA, which has 70,000 members but is growing fast, tends to handle smaller cable shows.

In a highly unusual move, SAG leaders and actors including Jack Nicholson, Ed Harris and Viggo Mortenson have urged AFTRA members to reject a deal with producers recently negotiated by their executive. That's infuriated AFTRA leaders. "It's just unconscionable that one union should start a war against another," said Roberta Reardon, AFTRA's president. AFTRA's members are voting on whether to ratify their deal, with the result due on July 8.

Other actors, including Tom Hanks, Susan Sarandon and Alec Baldwin have come out in favour of the AFTRA deal and are urging SAG to sign a deal similar with producers. They fear that Hollywood - and the tens of thousands of blue-collar workers dependent on Hollywood for their livelihoods - may never recover from another prolonged strike.

"With millions of folks already losing their homes nationwide," says Variety's Peter Bart, "and with the impact of the writers' strike still being felt in Hollywood, the impasse seems all the more ominous. And no one has an answer." ·