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- This may sound a bit flippant and even a bit of an arcane reference, but what was that tagline after the release of "Jaws 2," the sequel to the amazing "Jaws"?

the tagline in "Jaws 2" was something about just when you thought it was safe to go back into the water.

I'm Chris William, and welcome again to the most widely watched and longest running program on Carolina business, policy, and public affairs.

And just when you thought it was safe to start reading the news again or watching after a political debate, it seems that the anxiety around the economy, hurricanes, schooling, and more malfunctional political discourse is clear and still dominant.

As we do every week, we will try to make sense of some of these central themes going on in the Carolinas and what's important to know now.

And we do it with three key leaders from across the region.

And we start right now.

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(energetic music) On this edition of "Carolina Business Review," Mike Brenan from the South Carolina Chamber of Commerce, Gary Salamido of the North Carolina Chamber of Commerce, and Alan Smith from One Spartanburg Inc.

Sustainable Business Council.

(energetic music) - Hello and welcome again to our program.

Almost happy fall, and thank you for supporting this dialogue.

I'd like to welcome virtually now three key leaders from across the region.

Michael Brenan from South Carolina's Chamber in Columbia, Gary Salamido from the North Carolina Chamber in Raleigh, and Allen Smith from the Spartanburg Chamber in the upstate of South Carolina.

Gentlemen, welcome.

And specifically, Michael, I wanna single you out because you're kind of new in the job.

It's a new gig for you.

(Micheal laughing) I know you're a recovering banker, and I know you chaired the South Carolina Chamber for a while, so you know the DNA, but you've got the job now, so congratulations.

(laughs) But thanks for joining us.

- Thank you, Chris.

- Michael, I'm gonna-- - I'm excited about it.

- Oh yeah, no doubt.

And I think probably will do a great job.

A lot of eyes watching this.

So again, Michael, congratulations.

Start with you, and I'd like y'all to answer this question, but as we get past a lot of the debate around the politics, presidential politics, and we get back into whatever a normal rhythm is, what one thing will be a concern for you?

Not a worry, but a concern.

What's on your radar?

Mike, we'll start with you.

- Yeah, I think the concern that is top of mind for me is it's what happens to the regulatory environment post-election?

You know, obviously if we end up with a Republican-controlled Congress, they'll probably see much of the new rules and regulations that have come as a result of the Biden administration probably rolled back.

You know, if Trump is certainly elected, he's gonna push for that.

You know, if we end up with a Democratic president and a Republican-controlled Congress, that's gonna be interesting.

The other issue would be what's gonna happen with tax policy, quite frankly.

You know, 'cause we're gonna approach a tax cliff on the 2017 Tax Cuts and Jobs Act, and those pro-business provisions are set to expire at the end of 2025.

So, those would be the two primary concerns at this point in time, Chris.

- Gary, what's on the top of your list?

And I don't mean just the chamber agenda, but you've been doing this for a while.

I mean, you got a pretty good sense of the lay of the land here.

What's your single biggest concern?

- Yeah, thank you.

And it's good to be with you today, as always.

And I think it kind of falls into two buckets.

One is getting beyond the noise and the toughness of the elections to begin to solve the problems that job creators, businesses are facing every day.

That the agenda of the job community of our members doesn't change.

So, for me, it's how long is it gonna take to get beyond the noise and the kind of the pain and the toughness of this political cycle?

'Cause it's one we haven't seen before, which has had a lot of disruptions all along the way.

It's very historic in many ways.

So how long is it gonna take for that healing to get done so that we can get to the work of helping people find good jobs in communities?

We have a great opportunity here in the Carolinas and in our country to make some fundamental reforms and to come together because we have a good economy, we have something going forward that we can build on.

Of course, there's challenges as Mike pointed out, but I think there's a lot of opportunity.

So getting beyond the noise to solve the problems that people in communities all over our state are faced with in order to get that good job and build that community.

- Alan, what's looming large for you in the upstate?

- Well, I would agree with Mike and Gary, I would say, you know, it looks like a rate cut is imminent, and that's a good thing.

But I think that has the ability to perhaps exacerbate an existing issue.

And that's workforce.

I mean, you would think in a community where 29 people a day are moving into it, that we would be able to have the people to fill the jobs.

But it's been said already earlier.

The problem is we have more jobs and more people.

And so when we get the rate cut, and I think the economy will respond well, I believe there's gonna be more hiring.

And it might exacerbate the workforce issues.

So it's something that we're focused on locally.

I think the state of South Carolina is rightly focused on it as well.

- You know, I know the three of you probably know this better than most of our viewers, but I do wanna go back to something, in July of last year, right in the middle of the summer of last year, 2023.

And I think this got lost in vacations, quite frankly, and it was really more geeky business news than it was anything else.

Bloomberg, sorry, excuse me.

Bloomberg reported that for the first time in this country's history, and this is pretty big, first time in this country's history that the center of gravity of wealth has moved from the Northeast to the Southeast.

And it went on to say, and I know you all are gonna know this, but it went on to say that the data now shows that there's more wealth based in the Southeast than the Northeast.

And it talked about 100 billion plus plus.

But I don't wanna get into the details of that, but what I'm leading to here and especially during presidential politics and the season that we're in, is it seems like four states, North Carolina, South Carolina, Georgia, Florida, have become this center of gravity politically and how the politics are being focused, and certainly in the South, but on tho those four states.

So Mike, again, to start with you, but please, you all, I'd like you to wade in on that.

Why have these four states become so desirable politically?

Is it because of the wealth effect, or is there something else going on here in your view?

- Wow, we could spend a couple hours talking about that, Chris.

You know, I came to South Carolina in the fall of 1999 and was previously in North Carolina and Virginia prior to that.

And so I've kind of watched the growth of industry.

I mean, obviously that was started by BMW way back when, when Carol Campbell was governor.

I just think more and more people are coming to the South, they're coming to the Southeast, and they're coming to retire.

And often, they certainly bring their wealth with them.

You know, it's not an inexpensive place to live along the coast of South Carolina.

We do happen to have some billionaires in South Carolina, which, you know, that may not have been the case in the past, but I think it's the growth of industry.

I mean, you know, South Carolina's the largest exporter of automobiles in the country.

You know, we've outpaced Akron on the production of tires.

Obviously what's going on with aerospace and Boeing has been a tremendous lift to the economy, and therefore, it's grown wealth.

So, you know, I think people are just leaving the northeast and they're bringing their wealth with them to the southeast.

- Gary does the political center of gravity, does this surprise you?

- No, I think the South and speaking for North Carolina and South Carolina has got really...

It's become really competitive, right?

We've become really competitive on our talent and our attraction of talent.

Our business climate's very competitive.

We're making infrastructure investments.

When you put all that together and you have a plan and you compete as fiercely as the four states that you mentioned are competing with each other, we all get better.

And people are seeing that.

They're seeing the opportunity not only for themselves, but for their children and for beyond, their grandchildren.

I mean, I have three grandchildren, and the opportunities that are gonna be in North Carolina, I think, are significant.

So when you have that growth and when you have that opportunity and we have the announcements and you have the population and the net in migration of talent and people from all over, you begin to get to be a place that people pay attention to.

And right now, the way it's structured, our states, people are paying attention to them because we're working and we're creating opportunity and people are coming and there's reasons for that.

So there has political consequences, there's census implications to it.

And you know, with that comes great responsibility too.

The South isn't sleeping anymore, the South is here and providing good jobs for people.

And what comes with that is a responsibility to help level out and to help do the things that are right for our nation.

- Alan, the cause and effect of some of the things that Gary and Mike just talked about, this is first-world problem, I'm sure you you would call it that.

And that's workforce housing.

And as you just said, 29 people a day moving to the upstate to Spartanburg area.

So how do we solve for that?

Are we solving for it now?

It's just moving slowly or are there some places doing better than others, but are there big things that we need to be doing about this workforce housing issue?

- So if people follow jobs and affordability, it doesn't matter.

Those are the top two things.

Every single year, Gallup does a poll, and we're winning in both of those categories, so I don't see population growth slowing at all.

And we do not have enough housing, you're right, at all levels, whether it's starter home or it's executive housing, we do not have enough housing.

But as it relates to workforce housing, you know, we've been fortunate here locally, where we're basically saying, if you wanna be incentivized on a multifamily project, then a certain percentage of your units must be affordable, must be attainable, 80% AMI.

And so, you know, I think there's some policy levers, and communities are realizing, ours in particular are realizing that, you know, we have an opportunity to be proactive here.

We're not at the point yet we're having to react to it.

There's other communities, like Charleston and Greenville, that are reacting.

We still have the ability to be proactive.

And through some of those local policies, I think we're building more affordable product.

Not as much as we need, but I think it's a good start.

- Gary, Mike, as Alan talks about the policy and changing the policy, is it inventory of workforce housing?

Is it the appetite of builders?

Is it the opportunity in different cities?

I mean, what's the biggest barrier for workforce housing and are we solving for it?

- Yeah, I'll jump right in.

It's permitting reform.

It's modernizing our permitting reforms between our localities.

You know, it shouldn't take longer to build something that does the permit...

Wait, see, it shouldn't take longer to permit something than it does to build it.

And so we've gotta modernize our permits, how we get permits, how we identify places for those, how we use land.

Right now, that's the biggest barrier, I think, is, you know, how do we work together between urban and rural communities to build the kind of housing for all parts of the workforce that we need.

So permitting reform, regulatory reform, Mike talked about it earlier, is a key part of how we're gonna be able to address this and how we're gonna increase the inventories.

We're gonna have to be innovative.

We're gonna have to look at public-private partnerships differently.

We're gonna have to look at how we and where we place the folks and how we integrate it with our communities that are more urban and those that are more rural.

So we've got to really modernized permitting.

- Michael, is there anything that would supercharge this process more than what Gary and Alan have already talked about?

- Well, you know, it's interesting.

We had a workforce symposium all day yesterday in Columbia, and that issue did not come up.

A lot of different workforce issues came up, you know, including what are we gonna do about childcare in this state?

And I know that's on the top of the list of the governor and of the speaker.

So I gotta be...

I mean, I agree with everything Gary said about the permitting reform, but that's just not an issue that, at least in Columbia, that I've not given a lot of thought to.

- Well, okay, so, but let's chase this one down.

You talked about childcare.

Both Michelle Saunders, secretary of Commerce in North Carolina, and Harry Lightsey, her counterpart in South Carolina, both said there is a childcare crisis.

And they used the term crisis.

Both of 'em used the term crisis.

I know you all have heard that term.

Is it that acute and who is solving for that?

Anyone, please, here.

- Well, I will tell you that, again, it's on top of mind for the governor.

It's on top of mind for the speaker.

It's top of mind for the Chamber of Commerce, both here at the state level and at the local level because it's a problem in every quarter of this state.

And-- - I'm sorry Michael, but in the interest of time, I want to get Gary and Allen on this specifically.

Allen, Gary, can general assemblies, can the State House, can Jones Street in Raleigh, can they fasten childcare funding to education funding and make it more palatable for everyone?

- I'll jump in, and I think we have to be innovative.

I think we really have to look at public-private partnerships differently.

I think we have to look at local, state, and business to come together and figure out how we can make it affordable.

You know, a couple things.

One is, we do have a crisis.

It's a over $5 billion impact here in North Carolina every year, we did a study with the US Chamber, and it's a bipartisan issue.

So I think we have to figure out how do we facilitate work through providing safe, affordable childcare.

And that means looking at it differently.

It means looking at the regulatory framework for our childcare systems and our childcare facilities.

It means that looking at innovative models that are public and private partnerships.

We have companies here that are building childcare facilities now on their campuses and then looking for how do we integrate with the local community?

How do we help pay for it?

And so we have to really look at it very, very differently.

And yeah, I think we can, I think general assemblies can, and we did a couple things.

We did a survey and it was clearly bipartisan issue, both Republicans and Democrats, where majority Republicans here know that it's an issue, but they want innovative, market-based solutions that come along with the support that the communities have.

- Yeah, Alan, what do you think?

Is there a connection between education and childcare that can be fostered further?

- So I'm gonna give you some continued admiration of the problem.

We have 15.7 childcare workers for every 1,000 kids under the age of 10 in Spartanburg County.

So, it's incredibly complex in terms of a workforce crisis.

The other thing that no one talks about is the private sector.

I mean, we often address this issue through the lens of the consumer and affordability and access and so on and so forth.

But I sat down and met with someone that's opened 260 childcare centers, and they really unpacked this for me.

And so, when you take on a six-week-old, you lose money hand over fist.

At one, two, and three, you're losing money hand over fist because the ratios are so high.

And they should be.

At four, that's when you start to recognize profitability.

Well, the unintended consequence of government provided 4K care is that year of profitability is now off the table for private providers.

And it's been a real challenge.

And it's why you're seeing more and more private providers getting out of the business, so we also need policy that helps the private sector as well.

- Let's shift a bit.

We have about eight minutes left.

And Mike, I wanna come back to you, because in the news recently, Boeing, in Seattle, Washington, the high concentration of of Boeing workers, in fact, 30,000 machinists went on strike within the last couple of days.

And has created quite an issue for the Boeing workforce.

Does that help the South Carolina site?

Because the whole point of the South Carolina site, as it came out of the ground in 2008, was a non-union shop with access to workers.

So do you think that's a boon for the South Carolina Boeing site?

- You know, I think it has certainly the potential, Chris, but I've, you know, this news came out last evening.

And I haven't heard a lot of commentary around it yet today.

But I think there's certainly potential there for maybe bringing more jobs from Washington to Charleston.

- And Gary, I'll bring you in on this, and not necessarily about Boeing, but the larger implication around unions in the Carolinas has always been non-union, mostly, at least in contemporary industrial complex that North and South Carolina are now.

So does this start to...

I'm just not gonna say this right, Gary, but does the dialogue around union efforts to unionize in the Carolinas become more acute?

Are you confident that the Carolinas will continue to go down the road of resisting what the bad parts of unionization?

How does this wash over you?

- Yeah, we're very aware of it and we're very attuned to the increased activities that we're seeing across a number of industry sectors with regard to union activity.

And yeah, we think that the Carolinas would be a prize for the union community, and we're gonna stand very resistant to that.

I mean, the right to choose whether you not or join a union or not is important.

That right to work is critical.

It's the reason we have a good quality of life down here.

It's the reason that people are coming here.

So we're seeing more activity.

When you see a union representative at both the Republican and the Democrat Convention given such prominent roles, it's really important that we recognize that union activity is increasing, there's generational differences in how they look and feel about unions.

From where I'm sitting, we're very aware, we're diligent, and we're gonna keep our guard up, for sure, to make sure that North Carolina remains a right-to-work state.

- Well, we have about about four minutes, and I do wanna come back to something we have not talked about, at least in this program yet, in this program, and that's innovation.

Innovation is used a lot.

It's ubiquitous.

It's sometimes arcane.

It's sometimes opaque, but it's talked about a lot, about innovation circles, innovation corridors, and it's important.

Sometimes we don't know how, but, so let's unpack for just a minute here.

Innovation, how do we know, how do we measure innovation in the Carolinas and how do we know it is important?

Alan, we'll start with you since there tends to be a creative streak that goes on in the upstate.

- It's critically important.

And I think our economy in South Carolina is evolving.

I mean, we were agrarian and now we're manufacturing.

And you know, one of our focuses here locally is we gotta diversify.

You know, this is a area that was completely saturated with textiles, and we know what happened to textiles.

So we diversified our... We're trying to diversify our economic development approach.

We're now, you know, we're winning in manufacturing.

We're gonna continue to do so.

So, you know, through innovation, through we're trying to cultivate an environment to where we can better recruit those life science, bioscience jobs.

You know, Gary, if you wanna send any of 'em down from RTP, we'd be happy to take 'em.

(Gary and Chris laughing) - Nice try.

- But it is, you know, I think that when you look at the two states, I think North Carolina is ahead of us in that regard when you look at RTP and, you know, we don't have the research campuses that North Carolina has.

And so I think innovation is a tremendous opportunity for South Carolina in the future.

- Let me come back to something, Gary, not to skip over you, Mike, but let me go to RTP for a second.

Has RTP, over all the years, been able to standardize the measure of innovation, Gary?

Do you get the sense that there's a measurable accountability around innovation?

- Oh yeah.

And it's a cultural thing too.

And it's a recognized opportunity.

When you have it going on and when you have the collision that occurs between the university systems, those innovations coming out of there, the business community, and you have it in a place that has the infrastructure and business climate to support that, it really works.

I mean, I was just talking to someone the other day who's trying to do something around research park type initiative in an energy centric state out west.

And they're looking because what happens is the money comes where, you know, where it's, well, it comes where it's wanted and stays where it's welcome.

And when you have the research-intensive universities and the infrastructure, you can get innovations out of the labs.

And that's what happens, particularly life sciences here, but it's happened in energy and all kinds of places.

So yeah, it's very measurable.

- Yeah, we've got about a minute left.

And Mike, we started with you.

We're gonna end with you, Mr. Brenan.

So let me ask you this question, and as we... And literally have about a minute left.

As we now head into the last part of the year, and this economic expansion is long in the tooth, for sure, are you concerned that it's going to slow down dramatically between now and the next 18 or 24 months?

- Well, certainly that could be the case nationally, but I really don't see it happening in the Carolinas.

You know, you were talking about innovation and I was with Dr. Cutler yesterday, and was talking to me about all the innovative things going on at South Carolina.

And if they're going on there, they're going on at Clemson, they're going on at MUSC, they're going on at every university in North Carolina.

And I think there's a lot of innovation going on that we don't know about.

- Yeah, okay.

All right.

That'll be the final word.

Thank you.

And it's, Mike, by the way, it's also encouraging to see that actually Clemson and USC are working together on something, even if it's innovation, so thank you for bringing us that good news.

It's good to see you.

- Yes, sir.

- Good luck going forward, Michael, on the job.

Congratulations.

Gary, thank you for joining us, especially last minute.

And Alan, always nice to have you on as well.

Have a good weekend, gentlemen.

- Thank you.

- Nice to see you.

Have a good weekend.

- Thank you.

- Take care.

- Good to be with y'all.

- Thank you.

- See you.

- Take care.

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