The union that represents television and film writers voted Monday to authorize a strike a week before the union's contract is due to expire, the Los Angeles Times reported.
The Writers Guild of America and the Alliance of Motion Picture and Television Producers have been at an impasse over compensation and benefits. In addition to pay increases and larger residuals for shows streamed on Netflix and Amazon, WGA has demanded greater employer contribution to its health plan.
Although many see the vote as a negotiating tactic to pressure the Hollywood studios, a strike could have widespread repercussions through the TV and film industry.
The vast majority — 96.3 percent — of the Writers Guild of America voted in favor of the strike. The union said 67.5 percent of its eligible members participated in the vote, calling it a "historic turnout," according to the report. The union has roughly 13,000 members.
Instead of contracting with a commercial health plan, the Hollywood studios currently contribute 9.5 percent of a writer's pay to the union's insurance fund, which it uses to cover members' healthcare costs. But as a result of rising healthcare costs, the fund is running out of money, according to Vox.
WGA is projected to spend $163.2 million this year on health benefits while receiving $150 million in contributions from the studios, meaning it will lose $13.2 million in 2017. A reserve fund covers the excess costs, according to the report. The gap is expected to widen: By 2020, WGA will spend above $60 million more on healthcare than it brings in, which will nearly deplete its reserve fund.
In negotiations, which began in March, the WGA demanded the studios provide additional contributions to the health insurance fund. "In this negotiation, we don't seek a better health plan, only a solvent one," the union wrote in its overview, according to the report. "For both the health fund and the pension plan, additional contributions are important goals. And in the context of industry profitability, these contributions are affordable."