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- It has been more expensive to live now than within the last 40 years.

I'm Chris William and welcome again to the most widely watched and longest-running program on Carolina business policy and public affairs seen each week across North and South Carolina for more than 30 years now.

And we call this cost of living cost "inflation."

Never been higher in the last four decades.

What does that mean for summer vacations and, in general, as we head into the summer season?

Well, we'll unpack some of that with our panelists.

And later on, he is the president of one of a growing and important sister school in the USC system in South Carolina.

Michael Benson from Coastal Carolina University joins us and we start right now.

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(bright music) On this addition of "Carolina Business Review," Tom Ruhe of the NC Idea Foundation, Andy Shain from the "Post and Courier" and special guest Michael T. Benson, President of Coastal Carolina University.

(bright music) - And welcome again to our program.

Glad to have Andy Shain back and Tom Ruhe.

Welcome to you both.

Tom, welcome to the program for the first time.

Good to see you.

- Thank you, it's great to be here.

- We're gonna start with you for better or for worse, sir.

So Tom, a couple weeks ago, we did highlight that in North Carolina, Secretary of State Elaine Marshall's office released a pretty astounding number.

There was 40-plus percent new businesses created year over year, 21-20.

That's a pretty big number.

A couple of questions.

Is that, I hate to say it this way, is that legit?

(laughs) And then number two, is that a net number and how do you feel about it?

- Well, on the legitimacy part of that, I'm just gonna assume it is if she's reporting on it.

They have the records, the new firm formation filing.

So I'm gonna take that as absolutely legit.

And yeah, it's a very impressive number, but that's only the tip of the iceberg because that's the fourth consecutive year where we've beaten the previous year record.

So if you look at the meat of the press release that they put out recently around that it's actually over the last four years, we've had 499,100 new startups in the state of North Carolina.

So nearly a half million new startups.

And that's an incredible, that's an incredible number.

The other thing that the Secretary's office did was they surveyed these people that had been filing for these new companies.

And the survey responses are equally promising.

Most notably, over 9% of those firms, and they went back three years, were operating with revenues in excess of a half million dollars.

So Chris, you know, think of it this way, right, we fawn over ourselves when we can attract a company like Apple or VinFast to move here on the promise of 3,000 jobs.

But if you have 9% of a half million startups doing 500,000 in revenue or more, that's roughly a $24 billion company or the equivalent thereof, right?

We know from research from the Coffin Foundation that the average startup in North Carolina generates a little over four jobs in its first five years.

So again, do the math, you know, what if you had 500,000 companies generating four-and-a-half jobs per, the numbers are enormous.

And so this is, to me, one of the most underappreciated, under-understood benefits to the North Carolina economy has been the strength of the entrepreneurship ecosystem here.

- You know, Andy, I know this is not new to you.

And these kind of numbers are not new to you and Andy, you know, a little something about business, certainly, in the Palmetto State.

When you hear Tom talk about just the sheer volume of these numbers and compare and contrast that, if you will, to all of the headlines over the last 24 months, that we've heard about the hollowing out of hospitality, restaurants, service industry, et cetera, et cetera.

How do these things square against each other?

- I mean, the labor shortage is very real, you know, in all of the Carolinas and especially in South Carolina, especially in its biggest industry, tourism.

I mean, you know, again, as we are now really ramping up, you know, the first summer season where COVID, you know, while COVID is coming back a little bit, but still, obviously, it's not what it was the past two seasons where we're seeing it ramp up, and people are coming, but you're seeing longer lines to wait to get into restaurants.

Or you're seeing parts of restaurants that are, you know, closed off because they just don't have enough help.

And they can't fill those seats.

You're obviously seeing changes at hotels where they're not going to necessarily make up your room every day, or they're trying to find ways to speed your check-in so you're not dealing with people.

So you can obviously try to reduce your labor force in that sense.

And you know, it even also holds true in like Columbia, where again, you'll see some of these issues come to fore.

I mean, pretty much any restaurant I have gone to recently, you know, you've seen that shortage, you see that in the stores, you also see changes in hours.

So that's, you know, it's really interesting how we've come back in full force economically.

We're spending money, we're doing all of this, but we still don't have the bodies obviously to accommodate it in work.

- Gentlemen, Tom, so one of the dialogues is, we all know that swirl around all of this and permeate this, is the inflation number.

It's pretty astounding.

A 40-year high plus 8%, possibly levels out, but certainly not going down anytime soon.

Does this inflationary number, does this at all concern you about these job creations?

- Yeah, I mean like everybody else, you know, founders and entrepreneurs that are trying to build companies and hire people have to be cognizant of the impact of inflation.

And per Andy's, you know, comments about the labor shortage, that just exacerbates everything.

But in the long-term, you know, view inflation is something that historically cycles.

So I'm not overly concerned with it.

As I see it as a temporary, you know, situation that they have to accommodate.

It's mostly an impact to the entrepreneurial ecosystem around material, you know, raw goods.

And, you know, if you're out there in the supply chain trying to buy and acquire and timing, all of these things factor, time to market, you know, we've seen the companies that we have funded struggling with things like that and longer lead times, but I'm hopeful, like I said, that it's gonna be a temporary situation.

And if even if it isn't, you know, entrepreneurs will adapt and overcome and they'll figure out a new way to get around it.

- Well, and if I can jump in, Tom, I mean, you're bringing up a great issue also about the supply chain.

Again, you know, you go to the grocery stores, you go to the big box stores, you go, you know, you just try to really order anything for your business and more than likely it's going to take, either it's not available or it's gonna take twice as long to get what you need.

- Inflation has never been more apparent than it has been in housing.

And certainly that is writ large in the Carolinas.

I mean, we've had this in, as you both know, we've had this in migration wind at our back for a while now, but add onto that, just housing nationally.

Tom, start with you, the idea that housing is going like this and the economy may be leveling off or maybe even recessionary soon, is that a concern?

- You know, it always is, especially, you know, here in the Triangle area of North Carolina with the influx of, you know, very large marquee brand companies moving here, they have to, you know, worry about housing, which is already in short supply.

I think one part of the housing shortage story that's not getting covered as well as it could is how much of this is being exacerbated by the involvement of hedge funds.

So I don't know if anybody's been paying attention, but hedge funds have been buying billions of dollars of single family homes.

You're hearing this every day when, you know, they do that ubiquitous camera shot of the poor couple who offered a price, you know, $10,000 over asking and they lost out to an all-cash offer.

I got news for you, all these all-cash offers are not coming from, you know, a mid-thirties couple that saved their pennies over the last 10 years.

And so they're banking, you know, on the housing market to continue to be a great cash cow.

And I think that's an artificial thing that's straining the housing market right now.

And I don't know if there's a correction for that.

It may just be something, a new reality that we're gonna deal with.

And if and until there's, you know, a recession that's gonna have a big downturn in the housing market, I think it's gonna continue to be a problem.

But I see that as one factor that's not really being accounted for enough.

- [Chris] Andy?

- I mean, and in South Carolina, I mean, that's exactly what we're seeing.

I think like the rest of the country, we're seeing a little bit of a slowdown in the home sales, you know, compared to last year, of course.

Last year was just, you know, it was astronomical.

But what we are seeing are still double-digit increases in median home prices across the Carolinas.

And, you know, we have reported in Columbia, for instance, about this trend of these wall street hedge fund companies coming in and buying up the supply.

But it's interesting how you are hearing stories, again, in a housing market like, and again, I'm based here in Columbia, and it's not exactly considered the hottest market because, you know, you think about Charleston or Myrtle beach or even Greenville, which has been really taking off.

But even in Columbia I'm hearing anecdotal stories of people having to offer 10, 20, $30,000 above asking price in order to win these battles.

And, you know, it just makes you wonder, at some point who's gonna be able to afford a home these days?

- I would just add one thing if I may, that I think a non-obvious thing that could help a lot has been all the investment in infrastructure.

So as we light up more of our rural communities with broadband access, all of a sudden your housing market and housing inventory expands because so many companies are still, you know, working virtually or some hybrid thereof.

So that's allowing their employees to move out of the major metro areas where a lot of this consolidated purchasing has been happening.

And really the only gating factor for a lot of these rural communities has been, you know, I'd love to live here, but I can't get on the internet and I need to be able to Zoom like we're doing today.

So as we see the investment in the infrastructure into our more rural communities, I think we'll see an easing of the housing market pressure.

- We are quite literally celebrating commencement season in higher education.

Our guest joins us now and we'd like to congratulate him on commencement, not just at Coastal Carolina, but his own commencement in graduate school of an MLA.

We are joined now by the President of Coastal Carolina University, the chanticleers, Michael Benson.

Michael, not just on the commencement down on the Grand Strand, but your own commencement graduating from graduate school.

That seems ironic.

(laughing) - Well, first off, our graduation at Coastal was a wonderful celebration.

Vanessa Wyche, she was a native of Conway, head of the NASA Johnson Space Center down in Houston was our speaker.

And I'm happy to say that she's, it is the first honorary degree she has received from her hometown.

So not only did she speak, she got key to the city and Saturday was named Vanessa Wyche Day.

And it was really a high water mark for the entire year.

Last night, I graduated from Johns Hopkins University.

About every 10 years or so I go back to school.

I did it at Notre Dame and did all of the classes I avoided as an undergrad, like finance and accounting and statistics.

This one was really kind of fun.

It was a degree where I got to choose the classes I wanted to take.

And it grew into a book that will come out with Johns Hopkins press in October.

A biography, the first president of Hopkins, and if you know much about the institution, I know that's not what we're here to talk about, but it was the first research university in America, and in so many ways set a standard that a lot of schools have tried to replicate.

And a remarkable place and last night was a great celebration, I'm really happy to be done.

- You know, clearly, you have more than a passing interest in education.

And as you said, you have a book coming out on the history of the American research university.

So let me ask you a question.

And I think you know a little bit about the calculus around tuition and costs.

For a long time, as we all know, for decades, actually, the cost of living or the cost of tuition has been 2X of what the normal inflationary cost has been, maybe not right now, but the point is, is right now, we've got an 8% regular COLA, cost of living adjustment, for people on top of a university's tuition cost.

This is a little like insult to injury.

So Michael, President Benson, how do you manage through this and what are the risks for the future students?

- Well, you've touched on a really important, salient point that all of us are concerned about.

I'm huge on access.

I mean, I'm the product of a family that emphasized access to education, and I never, ever want to price out of access to education.

Those students that are in some ways on the margin, you know, whether they parse together a Pell grant or a Stafford student loan, or are granted aid from a university, the education, quite frankly, is the one fantasy that can really address just about every ill that our society is facing.

So if we keep increasing those costs to a point where the great majority of people won't have access to that American dream, we're doing an incredible disservice to our campuses and to higher education writ large.

So I'm happy to say that at Coastal we've kept in-state tuition rates flat for the last four years.

This will be our fifth year in a row.

We did increase out-of-state.

We looked at the elasticity of our out-of-state rates and we had a little bit of head room, but still in all, we're a popular place to come right now.

And our enrollment is strong, our freshman class for the fall bodes very well, but Chris, I am concerned and all of us should be concerned because as I look on the screen, and my guess is all of us had access to education in a time when it was a lot more affordable and families are struggling.

So we're trying all we can to put more money into scholarships, need-based financial aid and do everything we can to increase that access for anybody who wants to come to Coastal Carolina.

- Andy?

- You know, Michael, you are in Horry County.

It's obviously where, you know, your college is based.

It's the home to Myrtle Beach, it's South Carolina's fastest-growing county.

What has Coastal Carolina done to help tackle the pains of this growth with roads, housing, health, employment, jobs?

- Well, first I'll start with addressing the employment needs.

We're trying our best to, in conjunction with Horry Georgetown Technical College, which is located, really co-located on our campus.

For example, our RN to BSN program, given the acute challenges our county faces with healthcare needs and that growing population we touched on, think of all those people that have in-migrated to Horry County and kind of the demographic that is, so the people that do need those services.

So we're trying our best to be responsive to employment needs.

We also have an Eddie Dyer Institute that looks at kind of public lands and uses and roads and infrastructure.

You know, I've only been in Myrtle Beach and Horry County now for about a year-and-a-half.

And I've seen, they told me about tourist season and boy, people literally flood into our county, but I am concerned that we're growing so rapidly and we're denuding the landscape and losing those pine trees that they tell me, each tree gets 12,000 gallons a year of water that it absorbs.

And so flood mitigation and traffic patterns, and just overall growth is a concern to us.

And we're trying our best in concert with the Chamber of Commerce, with our county council to do all we can to be, not a problem, but a solution to some of those pressing and acute challenges that we face.

- Tom?

- You know, I hear these challenges and I think about our own mission of really helping individuals realize their full entrepreneurial potential.

I know the college has the Each One Teach One program to focus on the entrepreneurial mindset.

I would be curious to understand, you know, what, from your perspective and vantage point as the leader of the organization, you know, how important is empowering students, you know, with entrepreneurship or entrepreneurial programming or just entrepreneurial mindset writ large, you know, what are you doing, how much of a priority is that for your administration?

- Off-air we talked about how capable these young students are, and this generation is so promising.

If you have doubts about the future of our country or of society, just spend a little time on a college campus and hang out with these students because they do have that, in many ways, entrepreneurial fire.

We have various programs, whether it's the Wall Fellows, you've talked about Each One Teach One, but whatever we can do to put students in a position to find that spark, to find that passion they have, I tell students all the time, it doesn't matter what you study, you gotta focus on what you love, because if you do what you love, you'll find a niche.

You know, my background is Middle Eastern history.

Whoever thought I'd be a university president?

But I did what I loved and, you know, whether it's literature or physics or applied mathematics or geography, whatever it is, students gotta find that passion and follow that entrepreneurial spirit.

And we try our best at the university to have programs where students can get into whatever it is they want to study, but have those opportunities and apply what they're learning at the university to a whole range of, spectrum of options.

And I'll give you a good example, speaking of the Wall Fellows, they're in Iceland right now, and they're there presenting to our alumni base.

You wouldn't think it, but 20 years ago we recruited a bunch of Icelandic soccer players.

And as a result, outside of the United States, that's our biggest alumni organization.

So one good example of the broad reach of the chanticleers across the globe.

- You know, President Benson, this whole idea that Coastal Carolina is now becoming more prominent, not just on the Grand Strand, but the idea that it's been, and forgive me for saying it this way, but for decades, it's been kind of the sleepy sister of the USC system.

But now, not that there hasn't been a lot of work done, but now CCU, Coastal, the chanticleers, are becoming much more prominent as a research school.

Who would've thought that it would've been described as a research school before?

But not just in sports and academics, but now, as Andy Shain just said, one of the hottest growing markets in the country.

So what's the arc for the school?

What are the challenges and where do you see the school in 10 or 20 years?

- As an historian, I really have to give a nod to those people back in the 1950s that said, we don't know how to do it.

There's, of course, a state university up the road at Columbia, College of Charleston has been around for a long time, but we want a higher education presence in our county.

So I think it was 12, 13 people each put in a thousand dollars and that was the growth, that was the start, that was the genesis of Coastal Carolina College at the time.

And you're right, Chris, we were a branch of USC until 1993.

I have to put a little plug in for our basketball team, we hosted the Gamecocks on our campus and beat them by 24 points this season.

And it was a great moment because it was like little brother had arrived and yes, sports are important and I love athletics as much as anybody, but at day's end we're a university and our job is to educate these students.

Now sports have provided in many ways the vehicle whereby people have learned about the university, whether it was the COVID year of our football team, having a remarkable season, the success of our track and field program right now, our national championship in baseball, but whatever we can do to attract people to campus, then familiarize them with the really top-floor academic programs that we have.

I mean, our marine science program is one of the best in the world.

People come from all over to study marine ecology, just like Francis Marion does freshwater ecology, and there's this division of labor in the state.

So we know what we're good at, but we're getting better and better in those programs we've chosen to focus on.

And our reputation, you're exactly right, it's spreading.

- Tom?

- You know, I think about all the economic activity that could be coming out of, you know, the university there and my observation, having done a lot of this type of ecosystem work across the country and around the world is that some colleges are great, you know, for the students primarily, but they're ostensibly a walled garden, you know, when it comes to the rest of the community.

And it's rare that you see holes punched through the walls so that there can be, you know, direct interaction with, you know, communities.

And again, from my vantage point of entrepreneurship, you know, I'm curious to hear what you see your role as it is involving the community, the engagement with the community, you know, having student experiences where they can go out and get their hands dirty, you know, with local businesses and working with entrepreneurs, or maybe even civic engagement, you know, it could be government engagement and activism.

Just to hear a little bit about your philosophy and where you would like to see, you know, Coastal Carolina University become as a, you know, as an asset to the, you know, the community writ large.

- Well, let me start with a specific example, Tom, if I can.

Don Leonard, who was a Wake Forest graduate, a local developer and has endowed a program called the Leonard Service Scholars.

This was our first crop of graduates, that 50 service hours per semester.

And there's scholarship money available, thanks to Don and his family.

A program that he'd started at his alma mater, at Wake Forest, but it's that idea of getting students off of campus and into the community and to serve.

But if you look at our geographic setting there, we're in between 501 on one side and 544 and 544 is kind of what I call the athletic gateway, the football stadium is there, baseball.

501, where all those cars come down to the beach, I want to use that as our artistic gateway.

And one thing we're lacking in Horry County is a center for the arts and when people move here and they want those accoutrements that they had in their previous community, we don't have a performing arts center with 2,000 seats that can host those traveling exhibitions and shows to get people on the campus, because my belief is, once you get 'em on campus, they meet our students, they see our facilities, they'll wanna come for a lecture.

Maybe they'll do an (indistinct) sometime, maybe they'll pursue a certificate program.

So that, and I'll end with this, the penny sales tax is up for renewal.

And as you know, that's the huge boon for our county, for our school district, they get the line to share the money, but Horry Georgetown Tech and Coastal Carolina are also beneficiaries of those funds.

And so we're trying our best to be a great team player.

I really liked the metaphor, Tom, we're punching the wall through that castle.

They use the phrase that ivory tower and we've gotta get down from that tower and out to our community and make a difference and apply what our students are learning and making a difference in our community.

- And Andy, we have about two minutes left.

- Okay, Michael, real quick, the school just received its largest single donation ever at $10 million from the Conway Medical Center for a new health and human performance college.

You just broke ground on a $30 million library.

You have plans for a $15 million indoor football facility.

You know, talk a little bit about what that means for the university to have that kind of facility growth.

And you mentioned performing arts center.

What else is next?

- And about a minute, President Benson.

- Real quickly, the penny sales tax is key to a lot of those projects, but the indoor facility is all privately funded.

Our thanks to Conway Medical for endowing our new college of health and human performance.

We've had kind of a hiatus there during COVID and to now see those cones and the cranes on campus, I think signals that we're growing, that we wanna move.

And there'll be more projects you hear about in the future, but we're really excited about the center for the arts, so stay tuned about that.

- So it sounds like it's fair to say that the stock, if you will, of CCU is rising.

Is that a fair assessment?

- If I were in the market, Chris, I'd buy now.

We're a stock on the rise, so thank you.

- President Benson, thank you for joining us.

Again, congratulations on your own personal commencement, graduating from graduate school, but also stepping into a very vibrant and important community here in the Carolinas.

Best of luck going forward.

- My pleasure, thank y'all for having me.

I really appreciate it.

- Safe travels.

Tom, good to have you on the program.

Please come back, I hope we didn't scare you off.

- Not at all, happy to.

- And I meant to say, I hope Andy didn't scare you off.

And Andy, thanks so much for- - I tried not to be too scary.

- Thank you.

And Andy, we always appreciate your participation.

Thanks for watching our program.

If you have any questions or comments, CarolinaBusinessReview.org.

Until next week, happy summer, be careful.

Goodnight.

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