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- There is a general feeling that people have almost checking out now as they head into seasonal vacations and trips to the beach among other places.

Welcome again to the most widely watched and longest running program on Carolina business policy and public affairs.

Seen every week across North and South Carolina for more than three decades.

I'm Chris William.

In a moment we start this conversation again about the issues that matter most here in the region right now and later on, one of the highest paid university presidents in this nation.

But why is that important?

We'll unpack that at the beginning of the dialogue when we're joined by Dr. Randy Woodson from NC State.

Stay with us.

We start right now.

- [Announcer] Major funding also by Blue Cross Blue Shield of South Carolina, an independent licensee of the Blue Cross and Blue Shield Association.

And Martin Marietta, a leading provider of natural resource-based building materials providing the foundation on which our communities improve and grow.

On this edition of Carolina Business Review, Matt Martin of the Federal Reserve Bank of Richmond, James McQuilla, from the Orangeburg Chamber of Commerce and special guest Randy Woodson, Chancellor of NC State University.

(upbeat music) - Hello.

Welcome you to our program, gentlemen, thank you for joining us.

Good to see you, like the tie in the spring.

I mean, I think bankers can learn something - Definitely.

- (indistinct) Anyway, thank you.

Not to single you out, but Matt, you look good too.

- Thank you.

(laughter) Conservative as always.

- Yes, we like that in Federal Reserve.

We like that in Central Bank.

Anyway, guys, thanks for joining us.

Happy spring.

Matt, at the beginning of the program you talked a little bit here, people are already kind of checking out since spring break happened, Easter has happened.

I don't know that folks are in that big of a hurry to get back engaged 100%.

Are you seeing that in the economy?

Is there kind of a we're heading into summer and everything else, we're gonna ignore it?

- To a certain extent.

I mean, consumers are spending a lot on travel.

I don't know if they're planning trips as far out into the future as they did, but that's one area that's really holding up well.

And if you put in context when Covid hit everybody's at home, they bought Covid furniture, they're not doing that anymore.

People want to get out and about.

So yeah, I think with spring break and summer looming I think that's still going strong.

- You know, just for a second, let's talk about the durability of the spending and not just consumer spending, but, and I know this is not just our family but many families as they look to go to the beach.

I mean, the cost for a VRBO or some type of Airbnb or a home, it's not any cheaper than it was last year, and it's obviously more expensive.

I mean, how strong is this gonna be?

How long are we gonna see these kind of persistent high end, high cost vacations?

- I think it depends on household income levels.

So there are estimates out there of how much excess savings was left coming into this year and most of that was at the higher level of income.

And so I think for those households, it's full bore ahead.

Lower income households, we've been here since last summer that they're basically in recession.

So it's gonna be those who can afford it they're gonna keep doing it and they're gonna apply.

I think they're gonna, I think that part of spending is gonna hold up just fine but there is a real issue of sort of this excess savings running out and that being something that eventually becomes a weight on the economy.

- James, how does this kind of wash over you when you see how expensive and I'm not just talking about summer vacations but in general, travel has held up and even gone above where it was a year ago.

- Well, I think it's kind of keeping people closer to home.

It actually benefits us.

Those who are sponsoring festivals, Orangeburg has the Rose Festival coming up and Somerville recently had their Festival of Flowers.

You see people willing to still go out and be in the public and have fun, but maybe not go as far.

So they're looking for opportunities close to home and local festivals offer that.

- Okay.

All right.

Let's shift gears just a little bit.

Let's talk about workforce housing.

Yeah.

This thing is running in the back.

It's like a Microsoft program.

It's always running in the background.

A lot of dialogue.

Workforce housing is much more expansive than it used to be.

It used to be called low income housing.

Now workforce housing is people into 50, 60, $70,000 a year which is not a small amount of money, Matt.

How is workforce housing in the establishment and the growth of units how does the Fed see this progressing?

- So I think broadly speaking, we're just not building enough housing units overall, right?

And so you start to think about, well what's gonna loosen that up?

And there's lots of cost issues, the cost of land, the cost of construction, local and and other regulations that add to the cost of building.

So we've got a lot of cost issues to figure out.

But I think the location of housing then becomes an issue, right?

So remote work's more of a thing.

So maybe you can put housing, workforce housing in areas where land's a little bit more expensive.

And I don't know if that's an excerpt or if that's a smaller town.

The other piece of this I think is I think increasingly employers are starting to pay attention to this issue, and they want housing available for their employees.

We're heading into I think an extended period where labor's gonna be scarcer than it's been for the last say, 20 years.

And so employers are gonna start to pay attention.

I don't know what that leads to in terms of employer benefits for housing, but I think they start to give this a little more attention.

- James, you're an economic developer, you know a little bit about transportation infrastructure issues.

Does a more salient transportation plan fix workforce housing?

- I think it helps.

I don't think it fixes.

I agree with Matt in the fact that employers are getting involved and also we're working more so in the private sector.

They're just, they're individuals who maybe in the construction industry or just philanthropists in your home town that are trying to figure out what's gonna help us grow.

So whether it's the university and the private sector getting together or city and county government knowing that growth is coming.

Again, I'm gonna be very personal.

I'm talking about what's happening in Orangeburg and I see what's happening in other places, but if we look into history, it wasn't called workforce housing, but when the mill towns were developed across North and South Carolina, that's what you really ended up with.

They were creating housing for employment housing, for the employees that work for these companies.

And so companies now are realizing that they may have to look at doing that again because that's how you attract some of the people especially in manufacturing that you need.

They want to know that they're going to be able to have housing available and that they can afford.

- So I don't wanna be oppositional on this, and almost it feels like it's beating a dead horse when you try to get a general contractor, an architect, an economic developer in the city or the county of any region around a table and they develop a great idea, except it's a one-off.

In other words, they get some workforce housing and then it starts to normalize in those houses normalized to market level prices.

Which were back to the same problem where you don't have people that can afford housing.

So is there a fix to that?

Is there a public-private partnership that maybe isn't being utilized?

- I think so.

I think that maybe the solution is a public-private partnership.

I think that that government alone cannot fix the problem.

There's been a lot of discussion about what's necessary and what's needed, but not a lot of action.

I've talked to private contractors and they're ready to build, they're ready to make some things change.

But putting them together is probably the best solution.

- Matt, how do we solve for the initial cost is an affordable house but then market dynamics take control and the house is unaffordable for the next generation of buyers.

- The the easiest answer is you build more housing, right?

And you make the supply to the market enough that you either slow price growth or bring it down.

It requires a change in local policies whether it's density or other venues or avenues.

The thing is, people want more housing.

They recognize that housing is insured they just don't want it near them.

So the moment you talk multi-family or something like that, you run into huge issues at a local level.

And, there's a political aspect to this that I don't know how to solve.

- You feel that?

- I saw that in the past.

I think there's a lot of excitement around growth.

And I think it's how we proposed the narrative.

I mean the idea of "not in my backyard" came about because people thought that it was gonna be low income housing, lower socioeconomic, and then the things that come along with that.

Right now it's about growth.

It's about the future.

It's about expansion.

I think if you look at it in a positive light, then the citizens see it as something positive.

- We have about a minute, I'm gonna give you the last word here.

Not as a fed executive, but as an economist, Dr. Matt Martin, how do you model for a recession?

Are you modeling for a recession?

- As a central banker, the focus is on getting inflation down toward our 2% target.

And so that's gonna take a little bit 'cause inflation as we once knew is a little stubborn once it's out there.

And the goal is not to bring the economy into a recession, but you gotta get supply and demand more in balance to get price growth down.

And that's the main objective.

- Nice.

Good non-answer.

I like that.

(laughter) That's very good.

And I say that 'cause I know you sir, and you're good at that.

Not non-answer, but that was, I know you're an economist by our, we'll come back to that.

Thank you gentlemen.

Coming up on our program, Beth Wood is the North Carolina auditor, and she had a a bit of a run-in with a class two hit and run back in December.

She is known for being the taxpayer watchdog as the auditor of North Carolina and has built a reputation on transparency and of course accountability.

We'll talk to her, not necessarily and only about her personal run-in, but how this changes the way that she goes forward as the auditor for North Carolina.

And then Dr. Pat Cawley is the Chief Executive Officer of the Medical University of South Carolina.

That is MUSC in Charleston.

He will be our guest again on this program as well.

However, our guest now is a horticulturalist and a biologist by formal training.

He has clearly learned how to navigate the highest levels of the nation's public university system though.

In his job now of chancellor at NC State for the last 13 years, he was one of the highest paid public university presidents in the country at 2.3 million and then subsequently donated 1.5 million of that back to the university in the form of scholarships and help.

Joining us now from the campus at NC State in Raleigh is chancellor, Dr. Randy Woodson.

Dr. Woodson, welcome to the program.

Thank you so much for joining us again, sir.

- Yeah, thank you Chris.

It's great to be with you.

And I appreciate no comment about my tie.

I chose to be spring today.

- I thought for sure there was gonna be some red included in there, of course.

But Dr. Woodson, thank you.

Dr. Woodson, I have to ask you, you made 2.3 million you gave 1.5 a million back.

What was your rationale?

- Well, let me start, as Chris, this is not my annual salary.

I've been here 13 years and the board years ago put in place a retention bonus that said if I stayed through my contract and met a certain criteria of growth for the university and success, that it would come in the form of this bonus payment.

And I told them at the time I was so grateful for that.

But my intention all along was to give that back to the university.

And in particular, I wanted to give it back in a way that developed scholarships for the dependence of our employees.

Many universities that we compete with around the country provide tuition breaks to their employees and to the dependents of their employees.

But as a state university, we're not able to do that.

So I committed that if we were all successful together and the institution was, and I realized in that one year this bonus that I would commit to giving that back.

And those funds were all raised privately by the board of trustees.

And so it was really a phenomenal thing for me, but I chose to use those resources to benefit all the employees at NC State when their kids enroll at our university.

- Dr. Woods, I'm sorry, excuse me, sir, for interrupting but thank you for doing that as a parent who pays for my son's education in the university system, thank you for doing that.

This may come back up in the dialogue around university calculus, but I do want to ask you something else that's pretty amazing.

In general we've had plenty of chancellors and presidents of the university on the program talking about the challenge and the headwind for public university tuition, but also admissions and declining admissions given some of the headwinds.

But yet at NC State you've had the single largest freshman class in the history of the school.

How do you square that?

- Well, it's by design.

The state of of North Carolina asked us and North Carolina A&T State University and UNC Charlotte to focus on the critical workforce needs of the state particularly in computer science and engineering.

In this program, you've talked about a lot of the investment in our state, in technology industries.

And we know if we're going to keep attracting and keep those industries at North Carolina we need to produce more talent.

And so we've been asked to grow in those fields.

And so our growth is predominantly in the field of business, engineering and computer science.

And fortunately for us, we have tremendous demand.

Just this past admission cycle, we had over 40,000 applications for a freshman class of 5,600.

So yes, we are growing, but our growth is strategic and it's really focused on areas of needs of the state.

- So the natural follow-up to that is, given the challenges of workforce in a fast growth state like North Carolina do you think your institution or just more broadly in higher education that we're well positioned to meet those challenges going forward?

And where are those stress points that you see?

- Yeah, that's a great question.

Yeah, I do think the state is well-positioned in a number of ways.

We have one of the strongest community college systems in the country with 58 community colleges.

We have one of the strongest public university systems that has 16 campuses with 16 very different missions that support different areas of the state's economy.

And then we have a plethora, that's a big word for a boy from Arkansas, but a plethora of private universities.

So I think we're well positioned, but I believe that the demand for education is changing dramatically.

I mean, we've historically thought about higher education as being the delivery of a bachelor's, a master's, a PhD, and, and that still is a big part of our portfolio, but increasingly, we're seeing the need for certificates and credentials that the private sector is asking us to deliver.

For example, we just established a certificate in artificial intelligence to help company employees learn more about machine learning and how that's going to impact the workforce in a particular company.

So I see education being more tailored to the needs of the state and the region in addition to the traditional baccalaureate comprehensive degrees that we've offered through our history.

- James?

- Yes, Dr., I want to go in a little different direction.

One of the things that I'm always trying to do is figure out how to bring community, government and business together to collaborate, to work together.

And as the chancellor, how do you do that?

How do you, with the current political climate the things that are changing between politics and education and community, because as you expand your footprint, you're expanding into the local community.

How do you work with putting all of that together and making it work, working with the legislators and working with your local community there in Raleigh?

- Well, I think partnerships are in our DNA.

We're a land grant university.

We were founded as a university with offices in all 100 counties in North Carolina.

We also have the benefit of the leadership of two former governors in one Democrat and one Republican of Jim Hunt and Jim Martin who transferred to NC State Land that we call Centennial Campus which is designed to be a public-private partnership.

So we have 76 corporate government entities that were on our campus in private buildings built by the private sector.

And the way I like to describe it is there are 6,000 people that come to work at NC State every day that I don't pay, because they're paid by all the private sector and the government agencies that are on our campus.

To give you one striking example, we have the National Security Agency on our campus.

We have a national oceanic organization NOAA on our campus, US Department of Agriculture.

So we do a lot of partnerships in a way that benefits the university.

But increasingly, and I think to your point, we are needing those partnerships to work on areas like workforce development, workforce housing.

It's a challenge for us as a campus because we're recruiting people from all over the country.

And Raleigh's not as affordable as it once was so public-private partnerships are essential to the way we do business and frankly, university leadership, now chancellors and presidents have to have acumen in the ability to work with the public and the private sector to bring projects together.

And it's a big challenge but it's something I spent a lot of time on.

- Chancellor, you mentioned AI and it is now not new to our lexicon and our dialogue but it is certainly new in that it's become and is increasingly being thought of as a disruptor, of course.

And are you the first university system to formally certificate an AI course or AI?

- I'm not sure of that, Chris.

I wouldn't wanna make that claim without but I can tell you we're among the first.

And we have some fantastic faculty working in AI.

- And this is not meant to be a leading question but do you see AI as being a major, with a capital M, disruptor?

- I do.

I see it being a major disruptor of education, for example.

We have a professor here, Jim Lester who leads the National Institute on Artificial intelligence for education.

I mean, just look at ChatGBT, our students are using ChatGBT, they're using it in the classroom.

I was just with an English professor last week that challenged his students.

He said, I want you to cheat, I want you to use ChatGBT to write your term paper.

And it was an interesting exercise, but artificial intelligence and ChatGBT in particular is also being used to write code computer code and not necessarily to replace humans but to augment the human intervention and writing code for computers and helping code writers understand where there are blocks in the code that disrupt the program.

So we're just starting to see as these new products come into market how ChatGBT is one example disrupting education.

I reminded people, I started college in 1974 the year Hewlett-Packard came out with a handheld calculator.

And my math calculus professor said, "you can't bring that into class."

Now you can't go to class without one.

- Yeah, yeah.

No, it's pretty amazing.

I think just the beginning of the beginning of what we're gonna see, Matt, next question.

- My head still stuck on workforce issues and one that stands out to me as a veteran is we've got a substantial veteran population.

I've heard you talk about NC State as a veteran and military friendly school.

Are we doing a good job of capturing veterans as they come off of active duty?

And is there more that we could do there?

- We're doing a good job across our system and certainly we feel like we are at NC State.

Having said that, there's always more that we can do.

We need to do a better job of helping veterans understand where they are in their educational journey and how those credits that they've amassed while they're deployed and around the world can be utilized and can be used toward college degree.

We've established a military and family center on our campus to provide support, everything from helping them with their financial aid helping them acclimate the college life helping their families acclimate to a new environment.

There's a lot we can do.

And it's an amazing group of talented men and women that are leaving the military and coming back into our communities that can benefit tremendously from education and also can benefit our communities.

So it's a big priority for us.

- Yeah.

I'm sorry, Dr. Woods, we have about a minute and a half left.

And James, I'm gonna have to ask a quick follow up question.

Dr. Woodson, you mentioned in some of your comments about the North Carolina Community college system and it is much similar to the South Carolina Technical College system.

And I know you know it well, chancellor but so as the general assembly debates not just the president's role of the system going forward but what community colleges look like.

What does a relationship, and again in about 60 seconds, what does a relationship between a four year university and a community college system look like in a perfect world?

- In a perfect world, it looks like clear articulation agreements where students in the community college understand how to navigate the transfer process and arrive at one of our institutions.

Secondly, we work a lot with community colleges on economic development.

Here in Wake County we are very close to Wake Tech but throughout the state, we have a close partnership with Central Carolina Community College because of all the growth in and around Sanford in areas of pharmaceutical manufacturing.

So it's about education and it's about economic development, and we need to partner 'em both.

- And Chancellor, thank you.

I know that was not, that's a lot of information to pack into a short period of time, and that wasn't a fair question in the last minute, but thank you, sir.

Thank you for your leadership.

Hope you keep the job for a while and thank you for what you've done so far at NC State.

- Thank you, Chris.

Good to be with all of you today.

- Thank you very much.

James, good to see you.

Matthew, thank you very much.

Until next week, I'm Chris William.

Goodnight.

- Gratefully acknowledging support by Martin Marietta, Blue Cross Blue Shield of South Carolina, Sonoco, High Point University, Colonial life, and by viewers like you.

Thank you.

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