The advertising industry has come up with a revolutionary, breakthrough, twice-as-bright-as-before proposal: Maximize profits by cutting the earnings of actors. And so, almost five months ago the 135,000 members of the Screen Actors Guild and the American Federation of Television and Radio Artists launched a coast-to-coast strike against the producers of TV commercials and ads. At press time it appeared that the unions' militancy and support from a battalion of high-profile celebrities was finally speeding the dispute toward settlement.

The producers have been demanding abolition of the "residuals" system, by which actors get money each time an ad is aired, and instead want to pay a flat fee. SAG/AFTRA not only oppose the rollback but are also calling for implementation of the residuals system in the burgeoning cable and Internet markets. At issue is basic fairness: The more a commercial is aired, and the more money it generates, the more an actor should earn from it. "This is a principle that employers can't bear to live with in the new economy," says John Connolly, AFTRA's first vice president. "They want all rights for all media in the universe and don't want to share the wealth with their workers." As it is, union officials argue, labor costs account for barely 1.4 percent of the billions currently spent producing and airing commercials. Contradicting the stereotype that all actors are wealthy, a full 80 percent of the unionized actors making commercials earn less than $5,000 a year in residuals.

The producers clearly misjudged the resolve and unity of SAG and AFTRA. They thought the unions would roll over after a short, symbolic walkout. But the two entertainment unions, already angered over runaway production (mostly to Canada), have tenaciously met the challenge and escalated the fight. When negotiations stalled over the summer, strike organizers took their picketing right to the doors of multinational advertisers like GM, McDonald's and AT&T--co-producers of the commercials. The corporations felt the bite as central labor councils from Los Angeles to Seattle to Atlanta joined the battle. "Linking up with the rest of organized labor is a historic breakthrough for us," Connolly says. "It's the end of our self-imposed isolation, dating back to the blacklist days."

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