(bright music) - [Announcer] Major support for Carolina Business Review provided by Colonial Life, providing benefits to employees to help them protect their family, their finances, and their futures.

High Point University, the premier life skills university, focused on preparing students for the world as it is going to be.

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- Here we are, close enough to the midpoint of 2022.

And how are things looking?

What is our standard of living?

How is the rate of inflation?

What about tourism season?

And in general, what is going on here in the Carolinas?

We try to unpack that a bit with what we call our panel of insiders.

I'm Chris William, and welcome again and thank you for supporting the most widely-watched and longest-running program on Carolina business, policy, and public affairs.

We will start our dialogue right now.

- [Announcer] Gratefully acknowledging support by Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation upon which our communities improve and grow.

BlueCross BlueShield of South Carolina, an independent licensee of the BlueCross and BlueShield Association.

Visit us at SouthCarolinaBlues.com.

The Duke Endowment, a private foundation enriching communities in the Carolinas through higher education, healthcare, rural churches, and children's services.

(bright music) On this edition of Carolina Business Review, Christopher Chung from the Economic Development Partnership of North Carolina, Susie Shannon from the South Carolina Council on Competitiveness, Donald Thompson of The Diversity Movement, and Sara Fawcett from United Way of the Midlands.

(bright music) - Happy summer, welcome back to our program.

Glad to see four smiling faces in all four of you.

We are thrilled to have you back.

We consider this panel an insiders panel and that you will freely share your thoughts and what you hear from some of the people that you interact with.

Again, welcome.

Susie Shannon, I'm gonna start with you and it doesn't have much around economic development or business, but it certainly impacts policy and especially social policy.

And that's this whole idea of gun control.

It's now, of course, because of tragic situations, risen back to the fore when it comes to debate.

So do you get the sense that there is a secular shift in gun control and the possibility of it being in very conservative communities like the Carolinas?

- So since I hail from South Carolina, I'm sort of speaking a little bit on the observations within the South Carolina community, certainly a tragic circumstances, tragic situations all the way around.

I think from a policy maker's standpoint, our state-level officials have sort of signaled that they might be open to exploring certain aspects of gun control or some restrictive behavior components.

But I think at the same time, we're probably not going to see any comprehensive reform or any comprehensive changes going forward.

You know, what we've actually been seeing over the past several General Assemblies, you know, the two-year legislative sessions at a clip is an expansion of those rights, an expansion of carry rights, a loosening and easing of restrictions on the ability to carry firearms, to own firearms in the state.

So I think, you know, they're probably gonna be more of pointing to the past legislative activity about putting more increased presence of school resource officers, perhaps increased investments in mental health counselors, particularly in the schools to try to combat some of these issues.

- Donald, it's not gonna be a surprise to you that South Carolina tends to be a little bit more conservative when it comes to things like gun rights.

But Donald, do you get the sense that there will be more constructive dialogue around what gun reform looks like in places, in more purple states like North Carolina?

- You know, one of the things that, for me, is that when you look at the political landscape, they're all animals that are built based on the voting numbers.

And what's occurring is the lane of what is reasonable is starting to shift a little bit.

Things like mental health is a topic, but then why should someone that has mental health issues, right, that could harm others or themselves, be allowed to purchase a gun?

And so we're moving in a direction where some of the sensible things that are out there, it will be smart politically for both sides to adopt in some form.

Everyone's not going to be happy because people are gonna want some kind of transformational thing.

For me, where I'm optimistic is there'll be some marginal steps forward where people can cooperate even in this land of chaos.

- That's an interesting way to put it.

Sara, how's this wash over you?

- Well, I know, Chris, that we are focusing in the nonprofit community here really on that mental health piece that's come up.

And we are in particular looking at working with students even earlier than high school, looking at elementary school and middle school really in two ways, both in terms of social emotional learning supports, but also in terms of, particularly when you're talking about middle schoolers, starting at that point when it's not too late to really help figure out how to develop resources in terms of conflict management and how to deal with different situations that they might, that might hit them in a way that would cause them to be, to want to act out in that way.

So, long way of saying we need to catch kids as early as possible in terms of helping them come up with other ways of dealing with conflict other than gun violence.

And I will say in our community, specifically in Columbia, there is an effort, a very serious effort to try to bring law enforcement and gang leadership together to talk about these issues in a constructive way.

I don't think that's happened in the past.

And I'm optimistic that at least for this summer where they feel like, given that we're coming out of the pandemic and it's going to be a long summer that we've got the potential for violence.

And you put on top of that while we have not, thank goodness, had a mass shooting in Columbia, we have this year, in particular, had some high school, multiple high school students that have been lost to gunfire.

And that's brought it to the fore here.

- Chris, not to not to pigeonhole you to this, but to institutionalize this, does this become either a barrier or a box to check when it comes to now economic development?

And I mean more than just Apple or Amazon or those companies that tend to be progressive, all of a sudden does gun control, does R. V. Wade, do these social issues start to truly impact the box that has to be checked and has to be part of wherever a relo or a new corporate economic development announcement will be?

- Sure, thanks Chris, always good to be with you.

Let me first echo Susie and others' comments.

I mean, really what we've seen over the, not just the Uvalde incident, but just the number of shootings that have happened in the past two, three weeks.

I mean, beyond tragic at this point.

I mean, I think maddening and disheartening at this point that more cannot be done to make this less of a common occurrence in our society.

From the economic development standpoint, I think you're absolutely right.

I think as more of these social issues become prominent, I think corporate leaders and business executives are under a lot more pressure than they used to be to speak out about all these topics, whether that is gun control, whether that is abortion rights, I think they're getting that type of pressure from their own employees, probably getting some of that pressure from their customer base, maybe even from their shareholders and other stakeholders.

And to some extent you have to wonder, at some point, will the pressure to speak out about these social issues also affect where companies choose to locate and expand?

Because you have to imagine, where a company decides to put its flag down is in some way an extension of what values it represents as a corporation.

Now that's not true for every company, but for the companies that really have some latitude over where they choose to do business, we're already, I think, starting to see some of that impact of social legislation and these other non-business climate topics start to permeate that decision-making process.

And that's going to be the very interesting thing to see play out across all these different debates that our society is having and whatever side you fall on, as a state, I think you could see that potential where companies are going to evaluate you relative to what their corporate values are, and if there's not a good fit, it may be tempting for these companies to go ahead and look somewhere else, even if the traditional business climate factors are all positive for the state that they choose to move past.

- Yeah, I'd like to extend on what Chris was describing in terms of the role of the business leaders.

And I'll do so very briefly.

In the work that we do at The Diversity Movement, we're working within companies to create workplace health, right?

We're talking with lots of employees and employee resource groups that are frustrated in a significant way by the lack of speaking out, the lack of taking a stand, of the leaders within their organization.

And this will further put pressure on leaders to determine that moral versus monetization balance within how they do business.

And people are not looking necessarily for a stand on gun violence all the time.

But if you think about the wellness of your employee base, and now you have parents that are more concerned about the safety of their kids in school.

Now you have folks that are dealing with different mental health issues as a result of these tragic events that are triggering.

Now all of a sudden you have a topic that's not going to quickly go away.

And from a political standpoint, most folks try to weather a storm and a topic will kind of go away.

This is gonna have a little bit more legs because of the downstream impacts that are occurring.

- But, and let me take that one step further.

Susie, I'll bring you into this.

As Donald just talked about, the stand and people wanna feel like they're working for a value-based organization with shared values.

All of these things happen within a good economy.

When we're flush, when our personal balance sheets are good, we all feel much more progressive about sharing our views.

When the economy starts to tighten up, all of a sudden it's our balance sheets that take center stage.

How do we feel about our job?

How are we feeling about the prospects of, are we gonna be able to meet the obligations that we've taken on?

So Susie, do you get the sense, and I'm not trying to diminish this, but does the dialogue change if the economy starts to soften like we think it may within the next few months?

- So I, Chris, I definitely think we're looking at a, that supply versus demand dynamic.

I mean, we saw over the last couple of years firsthand, you know, kind of during the COVID corridor piece where I had a bit of a turnover, right?

As I think we have seen across the economy at large with the labor force participation sort of fluctuating, and those candidates were asking those questions, but they weren't around, as Donald was talking around, about specific issues.

It really was trying to get and generalize, you know, where the company stands from a culture-based standpoint.

A lot of it back then was around sustainability.

I think flipping over to kind of the business industry side, the evergreen topics from site selectors, from economic development entities continues to be workforce development.

It continues to be infrastructure and in a growing largesse, sustainability goals.

So I don't know yet whether it's a tight economy, whether it's a loose economy that we're yet seeing that compression actually occur, at least in our primary industry sectors across South Carolina.

I mean, we've actually had record numbers in recruitment, record numbers in economic growth, particularly in some of our urban and exurban areas.

- Well, let me- - Yeah, Chris if- - Yeah, go ahead please.

- I was gonna say, if I could jump on that.

I mean, I think you bring up an interesting question, which is, does a tight labor market, does a good economy, does it embolden employees to maybe be more vocal about these issues?

Which of course, like I said, is one of those sources of pressure on business leaders to speak up more, like what Donald said earlier.

Does a soft economy and maybe a looser labor market where it's harder to stay employed, does that change things?

Maybe on the margins, but I do think that some of this is probably generational, right?

I mean, I'm Gen-X, solidly in the middle of that generation, Baby Boomers, Gen-Xers tended not to be as vocal in the workplace about these issues.

They kind of, head down, focus on getting the job done.

I think that's a very different dynamic as you get to those younger generations now make up the majority of the workforce.

Millennials, the Gen-Z folks, I think for them, these social issues are very much part of what defines their identity and whether it's a soft economy or a great economy, I think they're always going to be expecting that their leaders speak up about these issues that come up in society just as they themselves would be vocal about it.

So it's an interesting question, but I think this is as much generational as it is an economic factor.

- Well let's shift completely to the more dismal science of econ.

And let me take it this way, Sara, Donald, please weigh in on this one.

So Sarah, do you get the sense in the economy with inflation as strong as we've seen it in more than a generation, that we are whistling past the graveyard to some degree, that we're, you know, we're having fun, so summer months, but we've got this, not just the specter of inflation, but also a real specter of a slowdown facing us?

- Oh yeah, there's no doubt, there's no doubt.

And I think when we look at the people that we serve here, they're feeling it first, you know?

Because they buy all the same things in the grocery store that you and I do, they pay the same price at the pump, no matter what it is.

And so there's no doubt to me that the signs, the signals are there and we're already seeing it among the people that we serve.

- Donald, are we in a recession already you think?

- Depends on how you define it.

People could debate that.

What I would say is that the word is being used, the macro-media has picked up on it and people are starting to feel the pinch at the pump or at the grocery store, so the indicators, right, for that slowdown are prevalent.

And one of the things that occurs even in advance of a formal recession call, if you will, is businesses start to change their economic behavior in how they hire, how they make decisions, how they grant raises, all of those different things.

And so one of the things I would share is there's been such a robust economy in terms of talent and people being paid very well for what they do.

I encourage people to make sure they're in the top percentage, right, of performers at what they do, because a lot of what's going to happen is there's gonna be a new reality, right, of who is that highly valued resource that will still provide that premium.

And then unfortunately, there's going to be some downstream pain where there was title inflation, where there was value inflation on your role and your delivery.

And that impact is gonna be pretty significant I think as companies tighten up.

- What- - Especially- - Go ahead.

- Especially in some sectors.

And I was gonna say, especially in some sectors, I had someone years ago- - Like what?

- To have been very, very successful in investments in return to say there are two things that people will always, you know, have to consume.

So therefore, if you invest in those, no matter the market fluctuations, you're still gonna have a great ROI.

And that's food and energy.

So you know, Donald talked about the grocery store and the pump.

So that's basically representing food and energy.

So we may complain about it, but we're still gonna consume it.

But then we're gonna have, you know, less money left over to do other things.

So is that going to impact the hospitality sector, which has already taken a big hit over the last couple of years?

The travel industry, although from some business flights I've had to book over the last couple of weeks, I've not yet seen (laughing) that they're hurting for money just yet as those fares go up.

So, I think you're gonna see very heavily-impacted slices of the economy and then some not so.

I mean, if you look at South Carolina, heavy advanced manufacturing, when you start talking, when you start layering on higher wages, supply chain, bottlenecks, those types of issues, that's just gonna compress that down.

And eventually it's gonna reach the end user consumer.

Maybe not today, maybe not tomorrow, but certainly in the short- to near-term.

- Chris, how does your team look at this?

- Well, you know, I'll reserve judgment on whether we're technically in a recession until obviously we have the economic data.

I mean, I think if anything, maybe the inflation that we've all seen, I mean, my god, here in Raleigh, it's $4.50 for a gallon of gas.

At the grocery store, I think I paid five bucks for a gallon of milk or half a gallon of milk and four dollars for a loaf of bread.

I mean it's a little crazy.

So maybe there's a recession of confidence that things are starting to turn.

A technical recession, I don't know that we're quite there yet.

Activity for us in economic development continues to be strong in terms of companies that are continuing to look for a new location and expansion sites.

What we are seeing that could be a harbinger of what's around the corner is, it does seem like as of the past couple of months, decisions are taking a little longer on the company's end of things, in terms of when we look at our pipeline and how that pipeline of activity ages, we are seeing a little bit of a stretch in the number of weeks and months a company is taking to reach a site selection decision.

And that could be explained by the fact that they're waiting to see how much inflation gets tamed.

They're waiting to see what macroeconomic conditions end up doing before they pull the trigger on a major new capital investment project.

So at least from what we can tell it's still busy, but there are a couple of indicators there that could suggest maybe we're in for a little bit of a softer period in the economy in the months ahead.

- Yeah, Donald, how does this play out for jobs?

Because you could argue, and many people do, well, we may be in a recession, but certainly not a jobs recession.

So with jobs as tight as they are, and as Chris and as Susie and as Sara talk about this expanding economic activity, how do we backfill the jobs?

Really, how do we backfill the jobs?

- I mean, it's an important question and there's no real right answers.

But what I will say that I'm recommending to clients that we work with is you have to reimagine the skills required to do a job and think about it in three contexts, right?

What is something that's your preference about the person you're looking to recruit?

What is something that's your tradition, right?

MBA from this type of school.

And what's truly a requirement to get the job done?

And when you rethink like that, now all of a sudden you can actually expand the pool of applicants by reshaping the skills that can actually do the 80 to 85% of the job that are required and remove some of the things that are nice to have so that you can actually fulfill and then grow.

A lot of companies have growth prospects that they can't fulfill because of the talent pipeline.

Right, so it's kind of that catch-22 of growth, but that's some of the advice that we're taking personally in the companies that I work with, but also in the clients that we serve, to kind of rethink and reimagine those job descriptions and what's really required.

- [Chris] Just to- - Can I- - [Chris] Hold on, yeah, go ahead Sara, and then I wanna follow you.

- I was just gonna say to tag on what Donald was saying, I think too, that it ties back into what we were talking about earlier with company values and brands.

And I think that that's an intersection there.

If a company or an organization has established visible and vocal values and they have a respected brand, they're not having a problem.

They may be feeling the great resignation, but they're not having problems filling those positions.

Whereas if you don't have, and you really need both of those things, the value and the brand, if you don't have, if you have one but not the other, you're having more trouble, I think, filling positions.

- One of those blue chip requirements for an applicant had to be, had to be four-year college degree, something equivalent, that seems to have gone by the wayside.

And I want to ask you for a couple of reasons and anyone please, is that now, we passed that a long time ago.

So being a four-year college graduate is not necessarily even that important anymore in jobs.

And I think I heard you saying something about that, Donald.

But so if that's the case, then what happens to the structure in education?

Anyone wanna take that on?

(laughs) - Someone used the term "reimagine" earlier?

I apologize for not recalling exactly who but so how we're having to reimagine the economy, reimagine certain, those cultural corporation workforce values.

You are already seeing entire industry sectors reimagine what that looks like.

Now, whether or not that is drilled all the way down into an HR-level recruiter is another story.

You know, for us, the South Carolina Council on Competitiveness, I, recent hire, for the first time ever stripped out the requirement of a four-year degree.

Now, however, I'm of that generation where there's an inherent bias in me personally, that I had to overcome.

And so again, we're getting back to Chris's point earlier about these generational changes.

So it may be these generational, migratory shifts of reimagining how that works, but corporations have been loud and clear and we've surveyed hundreds of them over the last couple of years that on-the-job training, apprenticeships, mentorships, internships, they will take those all day, every day.

- And I think- - Reassessing requirements for a job, like what Donald and Susie both talked about, I mean, that certainly is going to help employers better fill jobs among the people who are seeking employment.

Remember, you've still got a labor participation challenge affecting this whole country, including both the Carolinas, where a good chunk of the country's eligible working age population, about a third, give or take, is not actively seeking employment.

And so, what are we doing from a policy standpoint to remove the barriers that are holding some of these folks back from deciding to seek employment?

And until you solve a good chunk of that missing piece of the labor force, you're going to likely continue to have more open positions than you do people who are seeking employment.

And childcare often comes up time and again as one of those barriers that is especially preventing a lot of women from entering the workforce because they just don't have a good option.

And given the choice between caring for their children or going to work, that's a terrible choice to impose on anybody.

So are there policy measures at the state, local, or federal level that can perhaps address or remove this barrier?

You're hearing a lot about that discussion, of course, going on right now relative to workforce.

- Don?

- And across South Carolina- - And we're hearing along those lines- Oh sorry, Susie.

- Go ahead.

(Susie laughs) - Please, someone.

Yeah go ahead.

- I was just gonna say that it is, on that childcare issue, Chris, you're absolutely right.

And it is not just in like the zero to four, the traditional, what we think of with daycare.

It's now, what we're seeing, it's now also in, what kind of after-school programs are there?

What type of summer programs are there?

Again, not just at that early level, but at the middle school and early high school levels as well.

People are not just worried about what am I gonna do with my five-year-old?

They're worried about what am I gonna, what's out there for my 12- and 13-year-olds so they're not sitting at home by themselves?

- Donald, you get the last word.

- [Susie] Plus for South Carolina- - Hold on.

- [Susie] Oh sorry.

- Yeah hold on, Susie, just a second cause we're gonna have to wrap it up.

Donald, you get the last word.

You got about 30 seconds.

- And I can take 10 seconds.

Certifications and skill-based training is gonna be a new paradigm.

And I'll yield the floor to my colleague.

- No, no, no, say that again.

What based training?

- Skill-based training.

- Skills, right.

- Right, so when you think about what community colleges can offer, when you think about what certificate programs can offer, you can now dial in to a very specific role-based need with a company and give more encouragement for people to take advantage of that opportunity because they can see themself in that new job, because the training is 8, 12, 24 weeks, versus four, two or three years.

And when you can change that barrier psychologically, now all of a sudden you get more people that are willing to make those career transitions.

And I think there's a lot of opportunity for that.

- Okay, Donald, that's the last word.

Thank you, wrapped it up well.

To all of you, thank you.

Always like to see your smiling faces.

We hope you get down to the beach and have some relaxing summer.

Until next week, I'm Chris William.

Happy weekend, goodnight.

- [Announcer] Major funding for Carolina Business Review provided by High Point University, Martin Marietta, Colonial Life, The Duke Endowment, Sonoco, BlueCross BlueShield of South Carolina, and by viewers like you.

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