Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Jonathan and Kelly Show.
Speaker 2 (00:04):
Jonathan Rush, more than fifty countries have approached the administration
about lowering their non tariff trade barriers, lowering their terriffs.
Speaker 1 (00:12):
Kelly Nash, do you believe that President Trump's tariffs are
risking the chances of a recession?
Speaker 2 (00:19):
I don't, and I think we could see from the
jobs number that we are moving forward.
Speaker 1 (00:25):
The Jonathan and Kelly Show. We definitely had to put
a time stamp on this. It is ten to twenty
four on Monday the seventh, because after two or three
day two or three days of heading down, down down
to the market, now we got like a roller coaster
ride going on based.
Speaker 3 (00:39):
On the back gosh, it just dropped five hundred points again,
so it was a five.
Speaker 1 (00:43):
Hundred eight hundred is back down five hundred goodness great.
Speaker 3 (00:47):
When we recorded this interview that we're going to play back,
that was I think maybe before the market's even opened today,
so all the pressure was heading downwards. But you know,
look the stock market. The frustrating thing about the stock
market is it's all it's one of those crazy statements.
It's all an illusion. It's not real. So like companies,
(01:09):
do you know what I'm saying. So you take a
look at something like Netflix. Okay, Netflix has never, ever,
not one week of its existence, made a profit. It
has been a total loser its entire existence, and yet
it continues to double and quadruple in value because of
(01:29):
the illusion that investors are just putting confidence into Netflix.
That's got to be It's got to work at some point.
Speaker 1 (01:37):
It is so funny. Though we talked about it before,
but I'm always whenever I talk to guys who work
in the market, I mean, they are steeped and all
the statistical data and they're talking about the pe ratios,
I mean, and they pull up all this data, right,
And then it's funny because they seem so rationally the
thought process and it's so data driven. And then they
pick up a newspaper and read it and go, holy crap,
(02:00):
and sell sell. They just respawned emotionally, and I'm like,
what do you Suddenly you turned into my wife. Calm
down with the emotions for a minute.
Speaker 3 (02:09):
And so, I mean, that's the frustration with the market,
you know. But if I can find a little golden
nugget in here, it would be this is just a
small golden nugget. This is not a big one, but
for people like Kamala Harris and the Democrats, and even
here in South Carolina, James Cliburn, he was on this wagon,
the wagon of taxing unrealized gains. So what we saw is,
(02:34):
you know, I heard on Sunday that the last week
the market lost six trillion dollars, six trillion evaporated. Had
Kamala Harris been the president and James Cliburn had had
his way, those companies already would have had to pay
taxes on the earnings of the six trillion dollars that
(02:55):
they never got. That's right, and the way the stock
market works because a lot of people don't understand this,
which to me is so frustrating. If a company was
to try to realize those gains. For example, if insert
I don't know, Tesla. If Tesla, maybe that's a bad
example because they're a political thing right now. But in
certain name of big company Johnson and Johnson, yeah, Microsoft,
(03:19):
jan Johnson and Johnson, if they suddenly went up fifteen
to twenty percent in the market and suddenly they had
an extra one hundred billion dollars or whatever it is,
if they wanted to actually realize those gains, meaning turn
it from the illusion of just digital bs into actual cash.
(03:39):
The only way to do that is to sell it.
And if they start selling it at a rate where
they can actually get the money, that drives the market
down because the other investors go, wait a minute, why
are they selling.
Speaker 1 (03:51):
Why is it a wholesale sell off at the corporate house.
Speaker 3 (03:54):
Yeah, so the value of the stock. In order to
try to turn it into cash, you drive down the price,
so it's not ever actually worth what we say it's worth.
Speaker 1 (04:03):
And the government is the antithesis to the guy you
see on television all the time where if you invest
your money with him, you always make money. It's always up,
never make money if it goes up or down. Now,
with the government's taxation, they never lose money. It's always
assessed at its highest point and they never tax you
lower amounts of money. Yeah, it's the antithesis of that,
all right. So, and speaking of job numbers, which Scott
(04:25):
Bessett referenced at the end of that clip. That just
a small clip if you missed it from Meet the Press.
This is where we get to pick up with a
very important conversation for the state of South Carolina. Kelly Nash,
Welcome on the phone from the University of South Carolina
Darla Moore School of Business. He is a research economist.
Doctor Joey van Nessen.
Speaker 4 (04:44):
Good morning, Good morning guys.
Speaker 3 (04:45):
Yeah, good to have you here, doctor, And so we've
been talking about the jobs report, and that's interesting. Was
there inside that job's report you mentioned great news low
unemployment in our state? Are we statewide? I noticed nationally
we went back up unemployment from four to one to
four two.
Speaker 4 (05:06):
We did, and the national unemployment rate has hovered around
four percent plus or minus for the last year. In
South Carolina, we also currently have the same unemployment rate
as the national as the US does at four point
two percent, but ours has steadily moved upwards from a
low of three percent three point zero percent where we
(05:26):
were a little over a year ago, and hits ticked
up to about to today where it is at four
point two percent. But the reason for that is that
we've been going through a readjustment of our economy where
we've come off of a red hot level of demand
that came about during the pandemic period where we had
basically a pandemic bubble, which included six trillion dollars in
(05:49):
stimulus and a rapid labor market recovery, and that was
unsustainably high demand. And so we've been tapering off of
that high coming off of that of that bubble, and
so that's why the unemployment rate has been ticking up. Basically,
lower job growth is what we've been seeing over in
recent months, and we're getting back to pre pandemic norms there.
Speaker 1 (06:11):
You know. One of the things that always I have
to try to find the information because it's not readily
available because inside the unemployment numbers at U three, then
you get the U six. I mean, there are all
these determinations and a lot of it has to do
with the participation of the actual workforce at any given
point during the snapshot of the measurement. But how is
our workforce number holding up?
Speaker 4 (06:30):
So our labor force participation rate is lower than the
national average, and that is because of broader structural factors
that are different in South Carolina compared to the US.
For example, we have an older population, which means more retirees,
not a man, not as many people are working. We
also have an industry base that is more in the
(06:54):
manufacturing sector, more manufacturing heavy relative to the national average.
And if you look at workers in manufacturing, they tend
to retire in their fifties as opposed to in their sixties,
which is more the average for Americans as a whole.
So again they leave the workforce earlier. And then you
also have a large military based presence in South Carolina
(07:17):
and a lot of military retirees as well, and they
have the option typically of retiring earlier. So for all
those reasons, our labor force participation rate tends to be
lower than the national average by about five percentage points.
So at the national level it's about sixty two percent,
we're about fifty seven percent. And again, the labor force
participation rate, that just means if you take the total
(07:38):
the total adult population, what percentage of the total adult
population is either working or actively looking for work. That's
what we mean by labor force participation rate.
Speaker 3 (07:47):
Right, we're talking with doctor Joey van Ness and now
we're recording this on Monday morning. So depending on when
you're hearing this podcast, or perhaps you're hearing it back
on the radio on our weekend show or whatever, the
ground may have shifted under our feet even before this airs.
But if you were to speculate, which is tough to do.
(08:09):
Howard Lutnik is the Commerce Secretary and talking about manufacturing,
one of the things that Trump wants to do is
obviously get more manufacturing in America. I happen to agree that.
I think it's a fantastic idea, especially as Scott Bessen said,
COVID exposed the supply chain and we can't rely on
(08:30):
other countries to produce our medicines and other things. We
need to be able to produce it in here. But
Lutnik points out that the vast majority of these jobs
that are going to be here will be done by robots.
So well, this, I mean, how does this impact our
economy in your estimation? Also, I guess part B of
(08:50):
that question is if we are using Americans to produce stuff,
they have to get paid a lot more than we
would be paying the Vietnamese. So wouldn't that also drive
up prices?
Speaker 4 (09:01):
That's exactly right, And there are trade offs associated with
tariffs and their trade offs associated with everything we You know,
anybody who's had an economics course knows the phrase there's
no such thing as a free lunch, right, And that's
because we're always looking at trade offs of different policies
of different actions, and tariffs are no different. So what
we're facing is a scenario where if we do see
(09:22):
more manufacturing on shoring, which is what the Trump administration
is trying to do, that's at least that's one of
their goals. We could potentially see some successes there where
we have more investments in different communities across the US,
and that can create jobs and incomes for local residents
of those communities and can create higher rates of long
(09:44):
run growth. And we've already seen some announcements from Hyundai
and Honda and Audi and Mercedes and others that are
looking to potentially build more facilities in the US. So
those that's the benefits side, but then you do have
the cost side as you mis that it is going
to increase price levels because moving manufacturing to the US,
(10:05):
there's a reason that production has been overseas because it's
more efficient from a cost perspective, and so that will
have impact on price levels and especially in the short run,
can put upward pressure on inflation. And that's a major
reason why we're seeing so much back and forth in
the stock market because this week, because there's a lot
of concern among investors and among businesses that we will
(10:27):
see rising prices in the coming months, and that could
affect business investment decisions and consumer purchasing as well if
prices rise this year.
Speaker 1 (10:37):
You know, I know, you do all your work from
the Darla Moore School of Business, and you're looking at
it from a broad perspective and certainly taking in a
lot of specific information from different sectors, like we like
to talk about the tourism sector, and agriculture obviously is
a huge economic impact for our state. But the tariffs
and some of these stories that we're seeing from farmers
concerned about how this will affect their crops. We know
(11:00):
of any particular crop that we should be concerned about
in South Carolina given the way that this uncertainty continues
to loom in the background.
Speaker 4 (11:08):
If we look at what happens with tariffs in terms
of their impact on prices, that's going to impact consumer
spending and that will impact purchases, particularly in for food products,
which is going to impact agriculture. And there's actually a
very very straightforward relationship, almost a one to one correlation
between the CPI overall inflation and what we see in
(11:31):
terms of food purchases, and so inflation is very tied
to the demand for agriculture, and so that's one area,
that one leading indicator that they can be tracking to
get a sense of how the demand for different agricultural
products in South Carolina may be affected in the coming months,
largely driven by inflation and changing prices.
Speaker 1 (11:53):
Gotcha, soybeans versus corn and the.
Speaker 4 (11:55):
Like, exactly exactly, And soybeans are one of our biggest
exports in South Carolina from when we look at agricultural products.
So again, it all plays together and price levels become
very important when predicting future demand, particularly this year.
Speaker 3 (12:11):
Talking with doctor Joey von Nessen from the Darla Moore
School of Business, and again, I think that the Donald
Trump administration has done a very poor job of explaining
to Americans what their actual goals are as to how
they see this ending. So I guess you wouldn't know either.
Scott Bessen has talked about his three three three plan
(12:35):
for months, I mean long before he was even nominated.
He was talking about the three three three Plan, which
if I'm just reading this right, it involves reducing the
federal budget deficit down to three percent of gross domestic product,
getting real GDP growth back to three percent, and producing
an additional three million barrels of oil a day by
(12:55):
the year twenty twenty eight. If all of that is successful,
I mean, I don't know if that's even an achievable goal,
but if it was, what would that mean for the
average American?
Speaker 4 (13:06):
Well, I think the average American is looking for essentially
three things. Price stability, in other words, we want prices
that are not rising, certainly not at the rate that
they've been for the last several years. And they're looking
for job security as well, and also incomes to be
able to rise and to see good job opportunities in
the marketplace. And so that's really the goal at the
(13:29):
end of the day, when we look at different policies,
getting some combination of policies that can lead to all
of those. So that's certainly possible as we move forward,
and again there are a lot of variables at play,
so it's hard to say, but I think in the
short run, as you pointed out, Kelly, the biggest challenge
is to restore certainty where we have so much uncertainty,
(13:52):
and in a very real sense, at least in the
short run, when we look at where we land on
these tariffs. The specific deals that are made are not
necessarily as important as the fact that there are deals
and that we do have a roadmap for where we
are headed, because we like to say that uncertainty breeds paralysis,
particularly in the business community, meaning that if you're a
(14:14):
manufacturer and you're looking at looking out two, three, four
years in terms of planning, then you have to have
a good understanding of what the market landscape is going
to be, what your cost structure is going to look like.
And with all this back and forth, it's hard to
make plans, and so you're more likely to adopt a
weight and see mode and just kind of stay on
the sideline. So restoring that certainty is going to be
(14:36):
very important, and I would argue that's as important as
any specific any specific deal that may or may not
be made in the coming weeks.
Speaker 1 (14:43):
You know, I know that you're a research economist, so
you like to get bottom line numbers to make sure
that your numbers are accurate, because you're one of those
columns Excel spreadsheet kind of guys. That is right. I'm
going to ask you now just the top of your head,
just in your remembrance because under you're steeped in numbers.
You know, during the bi administration, it seemed like every
time we saw a job's report number, it was like
thirty to forty percent, where government workers being added to
(15:06):
the payroll. And now with the dose efforts to actually
eliminate some of the workforce and then bring that back
in line, and then some of the other challenges that
you've mentioned, we're going to see a hit to our unemployment.
But in particular having to do with the state of
South Carolina, maybe just Columbia. I was reading a story
about Kansas City, Missouri, where the federal government is the
number one employer in the city of Kansas City. I
(15:28):
know that in Columbia the state government and federal government's
not the number one employer, but it is a pretty
good percentage. Can you speak to the fact of the
economic drivers having to do with the government hiring versus
private sector in the state or any particular area that
comes to mind.
Speaker 4 (15:44):
Well, in Colombia, we do see more of a presence
of the government because you do have a large sector
in education in the state government of course, and then
also the military, and so there's a lot of government
government related positions there, and that's especially again, especially true
in Columbia, less so in other major metropolitan regions of
(16:06):
the state like Greenville and Spartanburg and Charleston. You also
have to look at other private sector employment or private
sector industries that are influenced by government activities. So think
about healthcare, for example, which is a major driver for
growth all across the country. It's the number one driver
(16:27):
in South Carolina, and a lot of healthcare demand is
serviced through government funding as well. And that's generally more
true on the service side, the service side of the
economy as a whole. And remember that over the last
several years, we've been going through a readjustment where the
(16:49):
goods market has been deflating after being at a high
in twenty twenty one where we saw a durable goods
bubble in the immediate apple for math of the twenty
twenty recession. So the goods market has been deflating, the
services sector has been coming back. So that means there's
(17:09):
been even more of an influence in these we might
call government adjacent sectors like healthcare and like education and
some of the others that we've mentioned as well. So
you've got this broader shift, and for Columbia specifically, we
do have more of a government influence than we do
in other areas of the state.
Speaker 3 (17:28):
Doctor von Nessen from the Darla Moore School of Business,
Scott Bessen made the case that the reason we had
to do this and do this now was because things.
I don't want to put words in his mouth, but
basically what he was saying was that he could see
in the economy the telltale signs of a collapse. He
(17:49):
said he saw these similar things going back into the
late nineties, ninety eight, ninety nine, and then we started
to have some problems in the early two thousands. We
artificially propped ourselves up, and then the collapse came in
two thousand and eight. He said that this collapse would
be much worse. Just looking at whatever it is that
(18:11):
he's looking at it, I don't understand what he's looking at.
He's a genius. He did point out in that statement, though,
that eighty four percent of the stock market is owned
by the top ten percent in America. The rest of
the stock market, the other twelve percent is owned by
the forty percent below that top ten percent, and at
(18:31):
the last half of Americans fifty percent of Americans have
no investments in anything and are, the way he described them,
complete debtors. They owe money on everything. And that's what
he's talking about when he says the middle class has
been destroyed in America. There is no middle class and
you cannot sustain a society without a middle class. Is
(18:53):
that an accurate statement? Because it doesn't feel like we're
on the verge of a collapse. It didn't feel like
we were in an emergency to anybody, Well, I.
Speaker 4 (19:02):
Would say that we're not on the verge collapse. I
don't think that that would be accurate to say. But
he's right and that we have had a period where
we are seeing many Americans who are having trouble finding
stable employment and that are looking for positions to provide
(19:22):
upward mobility, and that's been a challenge for a long time.
And so providing more opportunities for Americans to be able
to find a career path that has a significant that
has significant upward potential is very important. Manufacturing is certainly
one area where we could see some growth and that
(19:43):
could provide some potential there as well. And then the
other piece to that is focusing on job training because
we do have a labor shortage currently in the US.
Most employers over the last several years and across industry
sectors have not been able to find the workers that
they need. So job training for positions that are currently
(20:04):
open today is also another piece of that. So there
are multitude of factors, but I think he's tapped into
something that is definitely true, which is many Americans do
not have the have not had an opportunity to be
successful and to take advantage of the resources that are here.
And so the goal is to connect connect Americans, connect
(20:27):
potential workers with the employment opportunities that exist, and that's
what this is all about.
Speaker 1 (20:33):
To that end, I know you talked with a lot
of business community leaders and the like, and this is
one of the things you do in your job description
and know were heavily taxing your time, thank you and
not charging us by the hour. Here's my question. Are
you hearing more and more conversations. Certainly, I've had some
conversations with some CEOs that are very interested in getting
involved with the education of a young people, even in
the K through twelve, certainly into the Tech school and
(20:56):
to the University of South Carolina and other college campuses
about being able to a introduce these people to an opportunity,
these young people to the opportunities that are coming having
to do with the AI and other robotics. Are you
having more and more are hearing more and more conversations
about how to train up our South Carolinians sooner or
get involved sooner so that we can have this workforce
(21:19):
educated in such a way to take advantage of the
robotics on the way.
Speaker 4 (21:22):
Yes, And that's something that South Carolina does extremely well
and it's been one of our major competitive advantages over
the years. And that's one reason that manufacturing has done
so well in our state and it's been the leading
driver of growth over the last fifteen to twenty years.
And bottom line is, we don't need to change our
strategy in South Carolina. We just need to do more
of it, more job training. We need to get more
(21:44):
invested early on as you mentioned in K through twelve,
and provide students with just open their eyes to the
different opportunities that are available in South Carolina and show them,
show them what's available, what's out there, help connect them
to apprenticeships and to to internships. And I think that's
really the secret sauce, and that's what employers will tell you.
(22:05):
They're heavily interested and invested in this idea, but there's
no magic bullet. But the closest we get to, I
think is apprenticeships and internships, because if you can connect
a student to an employer, then if they do a
good job, then they usually get the opportunity to work
(22:26):
full time or have a professional opportunity. So if you
can make that connection while they're in school, then that
goes a long way to getting that student a job
and a career opportunity. So that's really what we need
to be focused on, I would say, more so than
anything else. So any policy that helps to improve and
increase the number of apprenticeships and internships is certainly worth considering.
Speaker 3 (22:47):
Well, there was a time in America, maybe starting around
the nineteen forties or fifties, where you could just be
have a great attitude and somebody who is willing to
bust your butt and you could make a nice life
for yourself in America without a unique skill set. And
that was a huge improvement because before that, if you
(23:09):
had a good attitude and worked really hard, you barely
scraped by. Before we got into the Industrial Revolution. But
now I think moving forward, it looks like everybody's going
to have to have a unique skill set in order
to try to be somewhat prosperous. You're going to need
some special training.
Speaker 4 (23:26):
That's exactly right. We're moving more towards a service based
economy away from a goods economy, and a service economy
that requires knowledge and a high degree of skills. To
your point, specific skill sets in order to be successful.
So that means more education, more job training, and that's
the future. That's where we are headed. So that's going
(23:48):
to be more and more important and something that we
have to continue to focus on.
Speaker 1 (23:52):
I can't remember if it was a CEO from rite
Aid or maybe it's a NOCO, but nonetheless, several of
the CEOs have said that one of the frustrations that
they have is not necessarily reaching the students because they
know where they are in class. Is that painting a
picture for the parents for the reinforcement inside their family
that your child can actually have an incredible future, and
(24:14):
helping the parents see it as well, so that they
can motivate their children to get more involved with the
availabilities that are posted. Plainly, they're on the bulletin board
in the hallways of their schools.
Speaker 4 (24:24):
It starts early, absolutely, it starts early. And it's important
to make students aware of what's available, what opportunities there are,
and get them excited and make them recognize too, if
they're looking to stay in South Carolina, they can have
a great career here, but they have to be shown
where those opportunities are and be provided access to these opportunities.
(24:48):
And again, I think that's what internships and apprenticeships are
all about, is showing the pathways so that if you're
working hard and you show an aptitude for these different skills,
here's a path to your success and it's you know,
you see where you can potentially go. So that's really
important and just providing those resources and that knowledge base
(25:09):
to highlight what's available to students and start early.
Speaker 3 (25:13):
Well, Darla Moore is going to get very upset if
we don't let you get back.
Speaker 1 (25:19):
You know, I started conversation with doctor Joey.
Speaker 2 (25:22):
He'll tell you.
Speaker 1 (25:22):
I called him one day on a mobile phone driving
from Saluda back into Colombia. I kept it on the
phone at like six o'clock in the evening for like
twenty minutes just talking because this guy's a wealth of information,
not only because of your job description, because of your
personal bend. And thank you for sharing your education and
your research with.
Speaker 4 (25:38):
It my pleasure. It's always good to be with you guys,
and look forward to next time.
Welcome to the Jonathan and Kelly Show.
Speaker 2 (00:04):
Jonathan Rush, more than fifty countries have approached the administration
about lowering their non tariff trade barriers, lowering their terriffs.
Speaker 1 (00:12):
Kelly Nash, do you believe that President Trump's tariffs are
risking the chances of a recession?
Speaker 2 (00:19):
I don't, and I think we could see from the
jobs number that we are moving forward.
Speaker 1 (00:25):
The Jonathan and Kelly Show. We definitely had to put
a time stamp on this. It is ten to twenty
four on Monday the seventh, because after two or three
day two or three days of heading down, down down
to the market, now we got like a roller coaster
ride going on based.
Speaker 3 (00:39):
On the back gosh, it just dropped five hundred points again,
so it was a five.
Speaker 1 (00:43):
Hundred eight hundred is back down five hundred goodness great.
Speaker 3 (00:47):
When we recorded this interview that we're going to play back,
that was I think maybe before the market's even opened today,
so all the pressure was heading downwards. But you know,
look the stock market. The frustrating thing about the stock
market is it's all it's one of those crazy statements.
It's all an illusion. It's not real. So like companies,
(01:09):
do you know what I'm saying. So you take a
look at something like Netflix. Okay, Netflix has never, ever,
not one week of its existence, made a profit. It
has been a total loser its entire existence, and yet
it continues to double and quadruple in value because of
(01:29):
the illusion that investors are just putting confidence into Netflix.
That's got to be It's got to work at some point.
Speaker 1 (01:37):
It is so funny. Though we talked about it before,
but I'm always whenever I talk to guys who work
in the market, I mean, they are steeped and all
the statistical data and they're talking about the pe ratios,
I mean, and they pull up all this data, right,
And then it's funny because they seem so rationally the
thought process and it's so data driven. And then they
pick up a newspaper and read it and go, holy crap,
(02:00):
and sell sell. They just respawned emotionally, and I'm like,
what do you Suddenly you turned into my wife. Calm
down with the emotions for a minute.
Speaker 3 (02:09):
And so, I mean, that's the frustration with the market,
you know. But if I can find a little golden
nugget in here, it would be this is just a
small golden nugget. This is not a big one, but
for people like Kamala Harris and the Democrats, and even
here in South Carolina, James Cliburn, he was on this wagon,
the wagon of taxing unrealized gains. So what we saw is,
(02:34):
you know, I heard on Sunday that the last week
the market lost six trillion dollars, six trillion evaporated. Had
Kamala Harris been the president and James Cliburn had had
his way, those companies already would have had to pay
taxes on the earnings of the six trillion dollars that
(02:55):
they never got. That's right, and the way the stock
market works because a lot of people don't understand this,
which to me is so frustrating. If a company was
to try to realize those gains. For example, if insert
I don't know, Tesla. If Tesla, maybe that's a bad
example because they're a political thing right now. But in
certain name of big company Johnson and Johnson, yeah, Microsoft,
(03:19):
jan Johnson and Johnson, if they suddenly went up fifteen
to twenty percent in the market and suddenly they had
an extra one hundred billion dollars or whatever it is,
if they wanted to actually realize those gains, meaning turn
it from the illusion of just digital bs into actual cash.
(03:39):
The only way to do that is to sell it.
And if they start selling it at a rate where
they can actually get the money, that drives the market
down because the other investors go, wait a minute, why
are they selling.
Speaker 1 (03:51):
Why is it a wholesale sell off at the corporate house.
Speaker 3 (03:54):
Yeah, so the value of the stock. In order to
try to turn it into cash, you drive down the price,
so it's not ever actually worth what we say it's worth.
Speaker 1 (04:03):
And the government is the antithesis to the guy you
see on television all the time where if you invest
your money with him, you always make money. It's always up,
never make money if it goes up or down. Now,
with the government's taxation, they never lose money. It's always
assessed at its highest point and they never tax you
lower amounts of money. Yeah, it's the antithesis of that,
all right. So, and speaking of job numbers, which Scott
(04:25):
Bessett referenced at the end of that clip. That just
a small clip if you missed it from Meet the Press.
This is where we get to pick up with a
very important conversation for the state of South Carolina. Kelly Nash,
Welcome on the phone from the University of South Carolina
Darla Moore School of Business. He is a research economist.
Doctor Joey van Nessen.
Speaker 4 (04:44):
Good morning, Good morning guys.
Speaker 3 (04:45):
Yeah, good to have you here, doctor, And so we've
been talking about the jobs report, and that's interesting. Was
there inside that job's report you mentioned great news low
unemployment in our state? Are we statewide? I noticed nationally
we went back up unemployment from four to one to
four two.
Speaker 4 (05:06):
We did, and the national unemployment rate has hovered around
four percent plus or minus for the last year. In
South Carolina, we also currently have the same unemployment rate
as the national as the US does at four point
two percent, but ours has steadily moved upwards from a
low of three percent three point zero percent where we
(05:26):
were a little over a year ago, and hits ticked
up to about to today where it is at four
point two percent. But the reason for that is that
we've been going through a readjustment of our economy where
we've come off of a red hot level of demand
that came about during the pandemic period where we had
basically a pandemic bubble, which included six trillion dollars in
(05:49):
stimulus and a rapid labor market recovery, and that was
unsustainably high demand. And so we've been tapering off of
that high coming off of that of that bubble, and
so that's why the unemployment rate has been ticking up. Basically,
lower job growth is what we've been seeing over in
recent months, and we're getting back to pre pandemic norms there.
Speaker 1 (06:11):
You know. One of the things that always I have
to try to find the information because it's not readily
available because inside the unemployment numbers at U three, then
you get the U six. I mean, there are all
these determinations and a lot of it has to do
with the participation of the actual workforce at any given
point during the snapshot of the measurement. But how is
our workforce number holding up?
Speaker 4 (06:30):
So our labor force participation rate is lower than the
national average, and that is because of broader structural factors
that are different in South Carolina compared to the US.
For example, we have an older population, which means more retirees,
not a man, not as many people are working. We
also have an industry base that is more in the
(06:54):
manufacturing sector, more manufacturing heavy relative to the national average.
And if you look at workers in manufacturing, they tend
to retire in their fifties as opposed to in their sixties,
which is more the average for Americans as a whole.
So again they leave the workforce earlier. And then you
also have a large military based presence in South Carolina
(07:17):
and a lot of military retirees as well, and they
have the option typically of retiring earlier. So for all
those reasons, our labor force participation rate tends to be
lower than the national average by about five percentage points.
So at the national level it's about sixty two percent,
we're about fifty seven percent. And again, the labor force
participation rate, that just means if you take the total
(07:38):
the total adult population, what percentage of the total adult
population is either working or actively looking for work. That's
what we mean by labor force participation rate.
Speaker 3 (07:47):
Right, we're talking with doctor Joey van Ness and now
we're recording this on Monday morning. So depending on when
you're hearing this podcast, or perhaps you're hearing it back
on the radio on our weekend show or whatever, the
ground may have shifted under our feet even before this airs.
But if you were to speculate, which is tough to do.
(08:09):
Howard Lutnik is the Commerce Secretary and talking about manufacturing,
one of the things that Trump wants to do is
obviously get more manufacturing in America. I happen to agree that.
I think it's a fantastic idea, especially as Scott Bessen said,
COVID exposed the supply chain and we can't rely on
(08:30):
other countries to produce our medicines and other things. We
need to be able to produce it in here. But
Lutnik points out that the vast majority of these jobs
that are going to be here will be done by robots.
So well, this, I mean, how does this impact our
economy in your estimation? Also, I guess part B of
(08:50):
that question is if we are using Americans to produce stuff,
they have to get paid a lot more than we
would be paying the Vietnamese. So wouldn't that also drive
up prices?
Speaker 4 (09:01):
That's exactly right, And there are trade offs associated with
tariffs and their trade offs associated with everything we You know,
anybody who's had an economics course knows the phrase there's
no such thing as a free lunch, right, And that's
because we're always looking at trade offs of different policies
of different actions, and tariffs are no different. So what
we're facing is a scenario where if we do see
(09:22):
more manufacturing on shoring, which is what the Trump administration
is trying to do, that's at least that's one of
their goals. We could potentially see some successes there where
we have more investments in different communities across the US,
and that can create jobs and incomes for local residents
of those communities and can create higher rates of long
(09:44):
run growth. And we've already seen some announcements from Hyundai
and Honda and Audi and Mercedes and others that are
looking to potentially build more facilities in the US. So
those that's the benefits side, but then you do have
the cost side as you mis that it is going
to increase price levels because moving manufacturing to the US,
(10:05):
there's a reason that production has been overseas because it's
more efficient from a cost perspective, and so that will
have impact on price levels and especially in the short run,
can put upward pressure on inflation. And that's a major
reason why we're seeing so much back and forth in
the stock market because this week, because there's a lot
of concern among investors and among businesses that we will
(10:27):
see rising prices in the coming months, and that could
affect business investment decisions and consumer purchasing as well if
prices rise this year.
Speaker 1 (10:37):
You know, I know, you do all your work from
the Darla Moore School of Business, and you're looking at
it from a broad perspective and certainly taking in a
lot of specific information from different sectors, like we like
to talk about the tourism sector, and agriculture obviously is
a huge economic impact for our state. But the tariffs
and some of these stories that we're seeing from farmers
concerned about how this will affect their crops. We know
(11:00):
of any particular crop that we should be concerned about
in South Carolina given the way that this uncertainty continues
to loom in the background.
Speaker 4 (11:08):
If we look at what happens with tariffs in terms
of their impact on prices, that's going to impact consumer
spending and that will impact purchases, particularly in for food products,
which is going to impact agriculture. And there's actually a
very very straightforward relationship, almost a one to one correlation
between the CPI overall inflation and what we see in
(11:31):
terms of food purchases, and so inflation is very tied
to the demand for agriculture, and so that's one area,
that one leading indicator that they can be tracking to
get a sense of how the demand for different agricultural
products in South Carolina may be affected in the coming months,
largely driven by inflation and changing prices.
Speaker 1 (11:53):
Gotcha, soybeans versus corn and the.
Speaker 4 (11:55):
Like, exactly exactly, And soybeans are one of our biggest
exports in South Carolina from when we look at agricultural products.
So again, it all plays together and price levels become
very important when predicting future demand, particularly this year.
Speaker 3 (12:11):
Talking with doctor Joey von Nessen from the Darla Moore
School of Business, and again, I think that the Donald
Trump administration has done a very poor job of explaining
to Americans what their actual goals are as to how
they see this ending. So I guess you wouldn't know either.
Scott Bessen has talked about his three three three plan
(12:35):
for months, I mean long before he was even nominated.
He was talking about the three three three Plan, which
if I'm just reading this right, it involves reducing the
federal budget deficit down to three percent of gross domestic product,
getting real GDP growth back to three percent, and producing
an additional three million barrels of oil a day by
(12:55):
the year twenty twenty eight. If all of that is successful,
I mean, I don't know if that's even an achievable goal,
but if it was, what would that mean for the
average American?
Speaker 4 (13:06):
Well, I think the average American is looking for essentially
three things. Price stability, in other words, we want prices
that are not rising, certainly not at the rate that
they've been for the last several years. And they're looking
for job security as well, and also incomes to be
able to rise and to see good job opportunities in
the marketplace. And so that's really the goal at the
(13:29):
end of the day, when we look at different policies,
getting some combination of policies that can lead to all
of those. So that's certainly possible as we move forward,
and again there are a lot of variables at play,
so it's hard to say, but I think in the
short run, as you pointed out, Kelly, the biggest challenge
is to restore certainty where we have so much uncertainty,
(13:52):
and in a very real sense, at least in the
short run, when we look at where we land on
these tariffs. The specific deals that are made are not
necessarily as important as the fact that there are deals
and that we do have a roadmap for where we
are headed, because we like to say that uncertainty breeds paralysis,
particularly in the business community, meaning that if you're a
(14:14):
manufacturer and you're looking at looking out two, three, four
years in terms of planning, then you have to have
a good understanding of what the market landscape is going
to be, what your cost structure is going to look like.
And with all this back and forth, it's hard to
make plans, and so you're more likely to adopt a
weight and see mode and just kind of stay on
the sideline. So restoring that certainty is going to be
(14:36):
very important, and I would argue that's as important as
any specific any specific deal that may or may not
be made in the coming weeks.
Speaker 1 (14:43):
You know, I know that you're a research economist, so
you like to get bottom line numbers to make sure
that your numbers are accurate, because you're one of those
columns Excel spreadsheet kind of guys. That is right. I'm
going to ask you now just the top of your head,
just in your remembrance because under you're steeped in numbers.
You know, during the bi administration, it seemed like every
time we saw a job's report number, it was like
thirty to forty percent, where government workers being added to
(15:06):
the payroll. And now with the dose efforts to actually
eliminate some of the workforce and then bring that back
in line, and then some of the other challenges that
you've mentioned, we're going to see a hit to our unemployment.
But in particular having to do with the state of
South Carolina, maybe just Columbia. I was reading a story
about Kansas City, Missouri, where the federal government is the
number one employer in the city of Kansas City. I
(15:28):
know that in Columbia the state government and federal government's
not the number one employer, but it is a pretty
good percentage. Can you speak to the fact of the
economic drivers having to do with the government hiring versus
private sector in the state or any particular area that
comes to mind.
Speaker 4 (15:44):
Well, in Colombia, we do see more of a presence
of the government because you do have a large sector
in education in the state government of course, and then
also the military, and so there's a lot of government
government related positions there, and that's especially again, especially true
in Columbia, less so in other major metropolitan regions of
(16:06):
the state like Greenville and Spartanburg and Charleston. You also
have to look at other private sector employment or private
sector industries that are influenced by government activities. So think
about healthcare, for example, which is a major driver for
growth all across the country. It's the number one driver
(16:27):
in South Carolina, and a lot of healthcare demand is
serviced through government funding as well. And that's generally more
true on the service side, the service side of the
economy as a whole. And remember that over the last
several years, we've been going through a readjustment where the
(16:49):
goods market has been deflating after being at a high
in twenty twenty one where we saw a durable goods
bubble in the immediate apple for math of the twenty
twenty recession. So the goods market has been deflating, the
services sector has been coming back. So that means there's
(17:09):
been even more of an influence in these we might
call government adjacent sectors like healthcare and like education and
some of the others that we've mentioned as well. So
you've got this broader shift, and for Columbia specifically, we
do have more of a government influence than we do
in other areas of the state.
Speaker 3 (17:28):
Doctor von Nessen from the Darla Moore School of Business,
Scott Bessen made the case that the reason we had
to do this and do this now was because things.
I don't want to put words in his mouth, but
basically what he was saying was that he could see
in the economy the telltale signs of a collapse. He
(17:49):
said he saw these similar things going back into the
late nineties, ninety eight, ninety nine, and then we started
to have some problems in the early two thousands. We
artificially propped ourselves up, and then the collapse came in
two thousand and eight. He said that this collapse would
be much worse. Just looking at whatever it is that
(18:11):
he's looking at it, I don't understand what he's looking at.
He's a genius. He did point out in that statement, though,
that eighty four percent of the stock market is owned
by the top ten percent in America. The rest of
the stock market, the other twelve percent is owned by
the forty percent below that top ten percent, and at
(18:31):
the last half of Americans fifty percent of Americans have
no investments in anything and are, the way he described them,
complete debtors. They owe money on everything. And that's what
he's talking about when he says the middle class has
been destroyed in America. There is no middle class and
you cannot sustain a society without a middle class. Is
(18:53):
that an accurate statement? Because it doesn't feel like we're
on the verge of a collapse. It didn't feel like
we were in an emergency to anybody, Well, I.
Speaker 4 (19:02):
Would say that we're not on the verge collapse. I
don't think that that would be accurate to say. But
he's right and that we have had a period where
we are seeing many Americans who are having trouble finding
stable employment and that are looking for positions to provide
(19:22):
upward mobility, and that's been a challenge for a long time.
And so providing more opportunities for Americans to be able
to find a career path that has a significant that
has significant upward potential is very important. Manufacturing is certainly
one area where we could see some growth and that
(19:43):
could provide some potential there as well. And then the
other piece to that is focusing on job training because
we do have a labor shortage currently in the US.
Most employers over the last several years and across industry
sectors have not been able to find the workers that
they need. So job training for positions that are currently
(20:04):
open today is also another piece of that. So there
are multitude of factors, but I think he's tapped into
something that is definitely true, which is many Americans do
not have the have not had an opportunity to be
successful and to take advantage of the resources that are here.
And so the goal is to connect connect Americans, connect
(20:27):
potential workers with the employment opportunities that exist, and that's
what this is all about.
Speaker 1 (20:33):
To that end, I know you talked with a lot
of business community leaders and the like, and this is
one of the things you do in your job description
and know were heavily taxing your time, thank you and
not charging us by the hour. Here's my question. Are
you hearing more and more conversations. Certainly, I've had some
conversations with some CEOs that are very interested in getting
involved with the education of a young people, even in
the K through twelve, certainly into the Tech school and
(20:56):
to the University of South Carolina and other college campuses
about being able to a introduce these people to an opportunity,
these young people to the opportunities that are coming having
to do with the AI and other robotics. Are you
having more and more are hearing more and more conversations
about how to train up our South Carolinians sooner or
get involved sooner so that we can have this workforce
(21:19):
educated in such a way to take advantage of the
robotics on the way.
Speaker 4 (21:22):
Yes, And that's something that South Carolina does extremely well
and it's been one of our major competitive advantages over
the years. And that's one reason that manufacturing has done
so well in our state and it's been the leading
driver of growth over the last fifteen to twenty years.
And bottom line is, we don't need to change our
strategy in South Carolina. We just need to do more
of it, more job training. We need to get more
(21:44):
invested early on as you mentioned in K through twelve,
and provide students with just open their eyes to the
different opportunities that are available in South Carolina and show them,
show them what's available, what's out there, help connect them
to apprenticeships and to to internships. And I think that's
really the secret sauce, and that's what employers will tell you.
(22:05):
They're heavily interested and invested in this idea, but there's
no magic bullet. But the closest we get to, I
think is apprenticeships and internships, because if you can connect
a student to an employer, then if they do a
good job, then they usually get the opportunity to work
(22:26):
full time or have a professional opportunity. So if you
can make that connection while they're in school, then that
goes a long way to getting that student a job
and a career opportunity. So that's really what we need
to be focused on, I would say, more so than
anything else. So any policy that helps to improve and
increase the number of apprenticeships and internships is certainly worth considering.
Speaker 3 (22:47):
Well, there was a time in America, maybe starting around
the nineteen forties or fifties, where you could just be
have a great attitude and somebody who is willing to
bust your butt and you could make a nice life
for yourself in America without a unique skill set. And
that was a huge improvement because before that, if you
(23:09):
had a good attitude and worked really hard, you barely
scraped by. Before we got into the Industrial Revolution. But
now I think moving forward, it looks like everybody's going
to have to have a unique skill set in order
to try to be somewhat prosperous. You're going to need
some special training.
Speaker 4 (23:26):
That's exactly right. We're moving more towards a service based
economy away from a goods economy, and a service economy
that requires knowledge and a high degree of skills. To
your point, specific skill sets in order to be successful.
So that means more education, more job training, and that's
the future. That's where we are headed. So that's going
(23:48):
to be more and more important and something that we
have to continue to focus on.
Speaker 1 (23:52):
I can't remember if it was a CEO from rite
Aid or maybe it's a NOCO, but nonetheless, several of
the CEOs have said that one of the frustrations that
they have is not necessarily reaching the students because they
know where they are in class. Is that painting a
picture for the parents for the reinforcement inside their family
that your child can actually have an incredible future, and
(24:14):
helping the parents see it as well, so that they
can motivate their children to get more involved with the
availabilities that are posted. Plainly, they're on the bulletin board
in the hallways of their schools.
Speaker 4 (24:24):
It starts early, absolutely, it starts early. And it's important
to make students aware of what's available, what opportunities there are,
and get them excited and make them recognize too, if
they're looking to stay in South Carolina, they can have
a great career here, but they have to be shown
where those opportunities are and be provided access to these opportunities.
(24:48):
And again, I think that's what internships and apprenticeships are
all about, is showing the pathways so that if you're
working hard and you show an aptitude for these different skills,
here's a path to your success and it's you know,
you see where you can potentially go. So that's really
important and just providing those resources and that knowledge base
(25:09):
to highlight what's available to students and start early.
Speaker 3 (25:13):
Well, Darla Moore is going to get very upset if
we don't let you get back.
Speaker 1 (25:19):
You know, I started conversation with doctor Joey.
Speaker 2 (25:22):
He'll tell you.
Speaker 1 (25:22):
I called him one day on a mobile phone driving
from Saluda back into Colombia. I kept it on the
phone at like six o'clock in the evening for like
twenty minutes just talking because this guy's a wealth of information,
not only because of your job description, because of your
personal bend. And thank you for sharing your education and
your research with.
Speaker 4 (25:38):
It my pleasure. It's always good to be with you guys,
and look forward to next time.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Therapy Gecko
An unlicensed lizard psychologist travels the universe talking to strangers about absolutely nothing. TO CALL THE GECKO: follow me on https://www.twitch.tv/lyleforever to get a notification for when I am taking calls. I am usually live Mondays, Wednesdays, and Fridays but lately a lot of other times too. I am a gecko.