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- Are we actually more than halfway through the summer?

Surprisingly, yes.

(laughs) Hello and welcome again to the most widely watched and the longest running program on Carolina business policy and public affairs.

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

It is a midsummer check-in of sorts, and we will unpack some of the things that are still key items going on in policy and in business.

We convene what we call, right around this time of year, an insider's panel.

And we start right now.

(exciting music) - [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, Susie Shannon from the South Carolina Council on Competitiveness.

Sara Fawcett of United Way of the Midlands, Tony Mecia of the Charlotte Ledger, and Patrick Woodie of the NC Rural Center.

(music ends) - Welcome again to the program.

Happy summer.

Anybody, you know...

So vacations.

What are you doing on vacation, Patrick?

- Well Chris, you know me, I just try to be on the front porch in Piney Creek (panelists chuckle) in Allegheny County as much as I can.

So that's my goal this summer.

- You're just trying to cool off.

- A lot of front porch time, and a lot cooler than the triangle where I spend most of my time.

- Beaches, anybody going to the beach?

- Labor Day.

Labor Day.

- Oh, you're gonna go when it's slow, you're gonna try to catch it when it's slow.

- Oh, yeah, yeah, definitely.

That's the plan.

- October.

(all laugh) - I'm looking for HVAC and air conditioning in our 47 beautiful state parks, right?

On a mission to try to hit them from the mountains to the coast.

- [Chris] Oh, that's a good idea.

- It's gonna be tough because you just said, the summer's halfway over, so I don't have much time left.

- You know, I mean, that's a pretty good pivot, Susie.

Dwayne Parrish from PRT South Carolina, and Whit Tuttle from North Carolina Tourism was here and they were talking about how this is still yet the biggest year in tourism.

And of course, that's a proxy for how we're feeling about the economy, and if you try to book something anywhere, a VRBO, or any type of rental, it's higher than it was last year.

So I guess, Patrick, I'll start with you.

We've got still, high rate of inflation.

We've got business that's never been better.

We've got general assemblies both in North and South Carolina that have these budget surpluses.

I mean, everything seems like it's turning up roses, but what are the biggest challenges you think given this hot summer and all of the things that we talk about?

- Well, the hot summer may one of the big challenges.

Certainly the volatility of climate is, I think, on top of everybody's mind.

It certainly is for us, you know, Southeast and North Carolina, and I know South Carolina has some of the same problems.

We have some of the most vulnerable geography in the country, and, you know, so as we enter hurricane season, we're going to really be thinking about that and worried about that.

And, you know, we've already seen some devastation to crops.

I know I heard a lot about the devastation of the peach crop in Georgia, because the really warm weather and then cooler weather that followed that.

So that's one aspect of it.

And from a rural aspect, it's certainly something that's top of mind for us.

- Sara, a little bit about policy.

So South Carolina wrapped up their general assembly, or at least the latest session, North Carolina still in session.

What came out of this session, do you think was the biggest win?

Or what do you think is encouraging at this point?

- I think the biggest win is Scout, you know, - [Chris] Scout Motors.

- Scout Motors.

To have the largest vehicle manufacturer in the world, Volkswagen, decide to come to South Carolina and be part of this ecosystem.

And certainly speaking selfishly from the Midlands perspective, you know, now we have our anchor tenants, you know, that we haven't had, that I think will move us forward as a region of South Carolina, really in the middle of that whole advanced manufacturing field, plus all of the economy that's gonna come along with it.

You know, you saw that happen in Charleston, you saw that happening in Greenville, and now it's the Midlands' turn.

- Is the cost of living, is the cost of working, is that still a, a pretty strong headwind, Tony?

- I mean, a lot of people I think, approach it that way, that there are challenges with, you know, costs of housing.

I think if you look at the Southeast in general compared to the rest of the country, it's still very desirable.

And you see that, I mean, the people are voting with their feet, you know, leaving the west coast, leaving the northeast, still coming down to the Carolina.

So as much as we like to say, well, we have all these issues with housing costs and, you know, inflation and all that.

I mean, I think as far as cost of living, I think, you know, it's still hard to beat this area of the country.

- Susie, what do you think?

- Well, you know, South Carolina has wrapped up its near $14 billion budget.

I think North Carolina is still maybe working on theirs.

And really the way the General Assembly has approached our budget for FY '24 is really around people, right?

It's the people's budget.

So we've got not only providing for the incentives benefit to recruit large scale manufacturing, particularly in underrepresented areas for that type of sector, but also a couple hundred million dollars for the Office of Resiliency to sort of attack and confront some of these issues that we're seeing around- - What is that, what does that look like?

- The Office of Resiliency.

I'm not sure how that program is gonna be built out just yet.

I'm sure they've got a plan in development but obviously, you know, preparing for those natural disasters and being ready, you know, it's always really easy to find a bucket of money to respond to a disaster, to respond, you know, to be very reactionary when something bad happens.

It's much more hard to invest on the front end to try to ameliorate or mitigate some of the issues before they actually happen.

So I think you're seeing a little bit of a shift instead of a reactionary, more of a proactive bit.

- Let's take a look at this issue.

You know, healthcare and education are always debated.

You know, it doesn't matter how much money a general assembly has or estate has or the wealth of anything, it seems like education is always hotly contested as well as healthcare.

So let's talk about education for a second, and Sara, I wanna come back to you because it's interesting.

You're a chief in a nonprofit and you're excited about Scout, that clearly is about business development and economic development.

So when you think about education and you think about some of the dialogue that go on in the State House, at least in Columbia, that there seems to be a disconnect if you listen to opponents around education, that the State House is not doing enough for education.

How do you look at it?

How do you come down on a fairly wealthy state with a lot of money in their coffers?

And I'm not asking you to take for or against, but where is that disconnect about education specifically, you think?

- I mean, that's a great question, and I don't know that we're ever gonna find the answer about exactly what that disconnect is.

What I see South Carolina doing is taking some very specific steps around basic blocking and tackling when it comes to teacher retention, in particular, teacher recruitment, beefing up the education, the ability to train educators in this state.

I think it's actually, we just have to take that elephant one bite at a time.

- Yeah, Patrick, same thing.

So North Carolina General, somebody takes a lot of heat that they're so conservative that they're not paying attention to education.

I'm not defending them or not, it's hard to believe that they wouldn't have an ear for it.

So I guess, how do you frame the dialogue when you talk to your friends in education, when you talk to your friends in the general assembly, how do you become kind of a broker of a good dialogue around that?

- Well, the dialogue we really are trying to lead and to foster and to make sure that it happens, is just talking about the importance of proximity of our rural students to really excellent educational opportunities.

And often that means our community college system because it's closest to the people.

There's been a lot of discussion this session about making a lot of governance changes to the community college system.

That hasn't happened yet.

And it hasn't been discussed recently that much, at least in public dialogue.

My hope is that is a system that they will double down on their investment in it, new leadership in place.

I think that's a positive thing.

- [Chris] Talking about Dr. Jeff Cox?

- Dr. Cox, and I think at the K-12 level, a lot of talk about choice and you know, putting tools in the hands of parents.

What I worry about, and I, you know, I'm a product of a very small rural school system with 1500 students and, you know, 35 years after I graduated, it still has 1500 students.

And, you know, the school choice in a very isolated rural part of this state, there isn't school choice.

You know, you've got the public school system, and that is your option.

And I hope we don't lose sight of that.

And they're important anchor institutions, the community colleges I think are the most important rural anchor that there is.

And that's where we need to be focusing and where we need to be investing.

- Tony, would that fix a lot if policymakers, and I don't mean just those in Raleigh, but I mean school boards, people in local communities, if policymakers just fix the idea of raising teacher pay, would that fix 50%, 90% of the issues that we have in schools?

- Yeah, it's hard to say, Chris.

I mean, that's really the big debate, you know, that's going on, is how much of a factor really is that?

And I think people agree there are a lot of other factors involved too, that that's certainly something that you need.

You need to retain teachers.

You want those good teachers in the classroom, you know, both the experienced teachers and the bright younger teachers that are coming out, and give them incentives to stay there.

But there are a lot of other challenges really that the schools have.

You know, you've seen some districts, partnering more with businesses, looking at the community colleges, you know, figuring out what is that workforce element that they have there.

But there are definitely some deep seated, you know, social issues as well.

They're not as easy to fix as just writing a check.

- Susie, are legislators not sympathetic enough to a teacher pay increase?

A way to figure out how to do it?

- Well, that was sort of belie the South Carolina General Assembly adopted budget, because they actually did provide funding to raise teacher pay along with other public employees like law enforcement and public employees across the board.

But there was a, you know, a definite debate and investment in raising teacher pay.

Is it going to get us into home plate?

No.

You know, I think just like Tony said, there are other variables and inputs into this.

It's working conditions in the classroom.

It's the infrastructure of the schools themselves.

If you look at the rural schools in particular, and there was some money allocated and appropriated for sort of replenishing some of the building infrastructure in some of the rural areas.

But, you know, a lot of it's also down to discretion in the classroom.

You know, if you've got teachers that are spending, you know, having to come in early, leave late, work on weekends, pay out of their own pocket, right?

They don't have that unencumbered planning time anymore.

But that's one of the policy shifts in South Carolina that we've actually seen movement on is requiring some of that unencumbered time in the classroom.

So that sort of relieves the pressure valve a little bit.

- And I think, and I hope this is the last time we ever have to say this, I think we are still experiencing COVID burnout where teachers had to shift so quickly in their teaching methods, their teaching styles, and then shift back.

And in all that process have to make up learning gaps.

So I hope, I mean, we've even seen it in a couple of educators that we've hired at United Way of Midlands.

We didn't intentionally recruit them, they left the profession and then- - [Chris] Because of that?

- Yes.

And it's sad because you want those great energetic teachers that have had a very rough couple of years, to stay there.

So I think it's, I think pay, Tony, in terms of what you were saying, I think it is one of several pieces and I think pay, particularly at the new teacher side has come a long way.

I think it can still be more competitive, but they've done a lot better.

But I think it's also retained, how do we retain teachers?

Some of that is pay, but not all of it.

- Yeah.

And you know, a lot of it has to do, you know, with the general economy, you see worker shortages throughout the economy, private businesses, government, and in the classroom.

And so with the unemployment rate so low, I mean, there are some people that are called to teaching and will do it.

There are others that say, "Well, look, I would like to do it, but it just doesn't make economic sense.

If I can go to the private sector," and, you know, we've seen wages really take off a lot in the private sector, and how do we keep up, you know, in the public sector?

- This is gonna be one of the things that we talk about coming up on the show is North Carolina Senate pro tem Phil Berger will be on our program.

Obviously we'll unpack that and many other things, as well as also coming up is chairman and CEO of Duke Energy, Lynn Good will be back on this program as well.

Let me go back to you, Patrick.

So we take this education, and as Tony just made this comment about, it goes into jobs and it goes into worker trainability and affordability and availability.

Are you seeing any, green shoots is probably not the way to say it, but do you get the sense that the jobs, the tight, tight jobs market is getting better?

- I do hear.

I am hearing anecdotally from the business owners I talk to, that they're feeling a little bit of relief from where they've been.

I do think there's something to the premise that COVID is still impacting a lot of people and a lot of the decisions they're making.

So we don't like the labor participation rate numbers.

When we look at those, they're better than they were and have inched up a little bit, but they're not where we would like to see them.

I mean, that's certainly true in North Carolina.

It sounds like it may be true in South Carolina as well.

We are seeing, you know, for some of our smaller towns in terms of how the economies there are doing, people are really, I think because of the pandemic and because of the last couple of years, they're rethinking where they live life, how they live life, and the terms on which they live life.

And for some of them, they're really thinking about what their options are.

And sometimes that option leads 'em to think about moving out of a big dense metropolitan area to a smaller place.

But they wanna check boxes.

And the boxes they want to check is, you know, do I have broadband access that I can rely on?

Do I have education access that I can rely on and feel really good about?

Do I have healthcare services access that I can feel really good about?

And if they can check those boxes, we see rural parts of the state for the first time in a couple of decades that are actually gaining population over the last two years as we've measured population change kind of after the worst of the pandemic.

Now is that a trend that's going to continue and going to accelerate?

I don't know, but I'll take it.

It's good to see, you know, that rural population growing in some places again.

- Faster than the growth in the urban course?

- No, I wouldn't say that, but, you know, not declining.

It is a step in the right direction.

- Back to your point about the school that you grew up in, the district you grew up in is the same as it was.

Susie, let me come back.

And this is not to be provocative, just to be provocative, but in South Carolina, I know North Carolina is the same way, posted some pretty good numbers in economic development over the last 12 months, probably historic, as well as North Carolina, as well as the economy grew.

So it's hard when you've got critics of the job situation that, and this is not a very technical term, but are saying that the sky's falling and yet these areas are still growing.

And yes, it's hard to get workers, but is it as bad as, is those that say this jobs is critical.

It's been critical and it's been the 11th hour critical for years now?

- So we have had record announcements, and they are historic.

And in fact, you know, last year we had a historic record announcement and then we beat, you know, right after that beat that prior announcement and then we beat it again all in the same quarter, right?

So we had a historic, historical year at the end of the day.

But even pre-COVID, we knew, we could see where, you know, before when you would recruit into a state, you would build it and they would come, right?

You would just, you'd build the infrastructure, you'd build spec buildings, the companies would come and then the people would follow.

You know, even pre-COVID, we started seeing a little bit of a reorientation where companies were making siting decisions on where the people were already located, right?

And so I think where you saw the influx into the state, you saw people, a perspective workforce despite, yes, Challenges with our labor force participation rate as well.

And you also saw some very robust training, upscaling, retraining programs.

And so I think there were a lot of assurances given to companies- - [Chris] Technical schools?

- technical college, when you look at the Red ESC program, you know, we've got a lot of robust, you know, ready to fire training programs.

So there are a lot of assurances given to companies and industries that we've got some workers here and we know you're gonna bring some workers with you.

I mean, even Scout probably already has a rough estimate of the workers that it's gonna actually bring into the state to start up.

However, there is already training programs in place to say, we can rapid fire train you, so we can get you what you need.

We can customize the training curriculum to what you need.

And we've got a long precedent with that, a successful precedent.

And so I think that sort of overcomes and overwhelms some of the critical pieces of, "Will they have jobs," you know, when you look at the population centers in the southeast 2010-2022, sort of rough out the numbers here.

South Carolina experienced the fourth highest growth.

When you look into the crystal ball and you look at the projections over the next 10 years or so, we're gonna have the second highest projected growth, only behind Florida.

We don't really count them.

So, you know, because of that, I think the companies are seeing that population in migration and thinking this is a good place to come.

- And this is a sidebar, Sara, this may not be fair to you, but you know, we've talked about it a bunch on this panel, and I know many people doing cocktail and coffee conversations too, and that's this whole idea you said that teachers still had some COVID burnout.

I wonder how much of this pandemic PTSD is it that or not?

With all deference to, people still get ill and still get COVID, but how much of this is still, we're reactive to what was an unprecedented pandemic and healthcare issue?

- I mean, you can always Monday morning quarterback, right?

You know, and we can go back and say that the pandemic, in positive ways helped to push classrooms forward.

You know, we should have had more technology resources, more ways for students to connect with teachers, more ways for parents to connect with their teachers and their school districts and their principals.

And the pandemic did do that, you know, it did get parents more involved because you did sit there and for six months listen to your child and your teacher's interaction.

And those are things that we should have been paying attention to and we should have been ahead of the curve.

- But do you think we're past the emotive part of it, the emotional reaction part?

Or is that what's still living in our psyche?

And sorry, not to go down this rabbit hole, but I know it's a deep one.

So we'll wrap it quickly.

- I mean, you know, on a personal basis, I'm probably one of the few people that you still know that did not get COVID, so.

- [Chris] Now you did it.

(all laugh and chatter) - We're gonna check on her in about a week.

(all laugh and chatter) - But just, I think we're down, I think as a society we are over the emotive part of it.

I think there are the after effects.

I mean, there is a learning gap.

We see it in the programs that we do through United Way.

We see it as parents in the public school system.

- [Chris] The educational achievement that everyone talks about.

- Still is ramping up.

So we are gonna have that for a while.

I hope we're over the emotive part.

- We have about four minutes left.

Tony, let's unpack this idea of, so you're centralized in at least, probably the richest area of the Carolinas, certainly the largest urban core, and that's the Charlotte region.

And what does employment look like?

Is it getting better, as Patrick just talked about from some of the rural aspect?

- I mean, better in terms of are companies able to find the kind of workers that they need?

I mean, you still hear the same thing, and you mentioned it, you know, you've heard these gripes for a long time that we don't have the workers we need now.

These companies are still thriving here in Charlotte.

They're still moving here, so they're getting the job done.

But, you know, I think they're finding different ways maybe to do that.

Maybe they're not growing the way they would want to grow because they don't have the people, but they, you know, there is still obviously a lot of growth in these urban areas.

You know, even though there are shortages of qualified people to do everything.

- Yeah.

Any suggestions about the unemployment issue before we move on here and how to lessen it?

- I really agreed with something Tony said and that is, I think I said it was getting better, but I also think that may be more businesses are just, they're just figuring out different ways to manage it and deal with it.

And they may very well be changing, - [Chris] More creative.

- More creative, changing original plans.

It's still the biggest problem that I hear businesses talk about.

- In the last two minutes, is anyone worried?

If there is an economic slowdown, if we do have a recession this year and we may have one now, is that a concern?

Is that on your radar?

Do you even worry, do you think about it?

Anyone?

- I mean some of the recent numbers that have come out suggest I think that we're still in good shape.

Everybody's been waiting for this other shoe to drop for, I feel like a year now, right?

We've been saying recession, oh, first part of the year.

Oh, second half of the year.

Oh, first part of 2024, and it hasn't happened yet.

And some of these inflation numbers that have come out look pretty encouraging while still trying to thread that needle with the unemployment rate.

You know, I think economists would say it's coming eventually, but we've been saying that for a while.

- Sara?

- Yeah, I mean the only thing that I can say on that is that we are beginning to see in individual donations decline.

And if you look at the USA, the Giving USA report that just came out, we are now back to pre-pandemic levels because there was a spike during the pandemic in giving, and that has started to taper.

So we are now in this past fiscal year equal on a national giving basis to where we were.

And that... - Is that a good thing or a bad thing for you?

- They're predicting it to continue to tick downward.

So, you know, and then if you put a recession on top of that, you know, we've gotta be out in front as nonprofit leaders.

- What about a recession?

You think there's going to be?

- I think, you know, going back to Tony's proverbial shoe, I think companies started preparing for this a year ago already starting to tighten their belts, particularly their marketing budgets.

You know, that usually tends to be the first one hit.

And I think we've seen that over the past year with concern over reduced sponsorship for events.

Where normally, you know, they open up the checkbook, ask how many zeros.

Now it's a little bit more targeted and a little bit more narrow.

And I think they're also wanting to see more return on investment dollars given that they're having to look inward and shrink as well.

But I also think we've seen the onset of technology.

- Which we probably need to unpack.

We didn't even talk about AI, but thank you.

Patrick, good to see you.

Thanks for being on the program.

- Thank you.

- [Chris] Susie, thanks for making the trip.

- Thanks.

- [Chris] As well as you, Sara.

And Tony, thanks, last minute you jumped in.

We appreciate it.

- It's 10 minutes away from my house, so no problem.

- Until next week, goodnight.

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

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(music continues)