♪ opening music ♪ ♪ Gavin>> Welcome to This Week in South Carolina.

I'm Gavin Jackson.

In a recent report from DHEC the number of opioid overdose deaths rose dramatically in 2020, just as the pandemic was beginning.

SC DAODAS Director Sara Goldsby joins us to discuss these alarming numbers, and what can be done to stop these tragic deaths.

But first, Dr. Joey Von Nessen, a research economist at the Moore School of Business at the University of South Carolina gives us an update on the state's economy.

Joey, thanks for joining me.

>> Thank you, Gavin.

It's my pleasure to be here.

Gavin>> So, Joey, let's start with the topic we've been always talking about this year, and that's inflation.

It's currently running at 8.5%.

Tell us how you see this increase in prices when it comes to food, gas rent, how that's affecting our state's economy right now?

Joey>> Well, we're clearly seeing it in South Carolina.

Most South Carolinians are being affected by a reduction in purchasing power that they've seen over the past year.

So, if we look at the average worker in South Carolina right now, they've lost purchasing power by about 1.5% over the previous 12 months, meaning that inflation has actually been higher than wage growth over the over the past year.

So, South Carolinians are feeling it, but there are some sectors that because they've been in such high demand, we actually have seen double digit wage growth.

So, it's not affecting all South Carolinians, but it's affecting most of them.

So, if we look at sectors like leisure and hospitality and construction and manufacturing, all three of those have seen double digit wage growth over the last year because of the ongoing labor shortage.

But in general, inflation is having very practical implications for most South Carolinians right now.

Gavin>> ...Joey, those are sectors that have really bounced back since the pandemic too.

Joey>> Significantly so.

Yes, and this recovery has really been broad based in South Carolina.

Most industry sectors have either fully recovered or largely recovered from their pandemic related losses and those three sectors are among the top, but especially leisure and hospitality, which has come roaring back in the last six months or so, because people are now going out and about their resuming their business and leisure travel activities.

They're willing to go out in public more.

regularly now, and the tourism sector has seen one of the best it's best years in...the last decade, just in the last 12 months.

So, the South Carolina economy right now, firing on all cylinders, but again, inflation being this, this looming threat as we move into the summer.

Gavin>> Joey, just to stick with labor really quick, since you brought it up, when we're talking about these double-digit wage growth.

So, does that mean that these employees specifically in these sectors have the power to kind of continue to control the board in a sense?

Joey>> For now, that is the case.

Employees very much have more negotiating power.

We see that because of wages continuing to rise.

We see more flexible hours being offered.

We see a lot of signing bonuses being offered by employers that are just really struggling to find employees right now.

That will likely continue going into the summer.

However, if inflation remains elevated.

that's the big wildcard because we expect that eventually, as we see, purchasing power come back down, and it continues to erode, consumers are going to have to start making tradeoffs at some point, because they're not seeing their wages keep up with inflation overall.

So, we do expect that consumer spending will begin to taper as we move into the second half of the year if inflation remains elevated, and that will begin to limit some of this, some of this labor shortage, at least to a small degree as we move forward.

Gavin>> ...This inflation also has to be difficult for folks who are on fixed incomes, who are lower income, really living paycheck to paycheck here.

So, they're really just, I guess, biding their time, essentially, until we can see some relief from inflation at this point.

Joey>> Exactly, and that's why it is such a major threat to our economy this year, and why the Federal Reserve is taking more and more aggressive postures with respect to combating inflation, looking at raising interest rates.

It's already done so once.

We expect for them to continue to do so in May and for several periods through the rest of 2022, because yes, this is becoming a significant challenge for South Carolinians and for Americans, and it's something we have to get under control.

Gavin>> Yeah, especially before it affects this growth that we're talking about, because we are still humming along in the economy here, but you are still a little bit worried about how inflation could essentially chip away at that.

Joey>> Exactly.

If we...look forward.

There's a lot of...talk right now, about a recession later in 2022, and how that risk is elevated, and I think there is...some truth to that, but we'll learn more as we move forward in the coming weeks.

I think is we're really trying to assess the probability of recession.

Two things to keep in mind.

Number one, we're going to get the first estimate for GDP growth for the first quarter of 2022, in just a few days, so we're on April 26, today taping later this week, we'll actually, see the first...release for the first quarter of GDP growth, depending on how that looks that will give us some impression of so far this year, how the economy is weathering this high rate of inflation.

Do we see weak growth?

Is it already affecting consumer spending and other facets of the economy, or is it not?

So, we'll get some insight there, and then secondly, how aggressive is Jay Powell at the Federal Reserve going to be in terms of raising rates, because, the more aggressive he becomes, the higher rates go, the faster they increase.

That's going to taper demand, and the Fed is walking a fine line trying to taper demand to pull down inflation, but not pull down demand so much that it puts us into a recession.

So, those are two key factors to watch, and we can see how much wiggle room the Federal Reserve actually has, by looking at a very practical economic metric, the job openings rate, because it has been uniquely high, higher than we've seen it in the last 20 years since the pandemic began, and it's significantly higher than what we would normally expect, given the current unemployment rate in South Carolina.

So, we may see that job openings rate come back down, but if it gets below where we would normally expect it to be, given this level of unemployment, that's when we begin to get concerned about layoff activity and potentially a higher risk for recession.

Gavin>> Yes, because you're always talking about watching that unemployment metric, and that being a pretty good measure for our economy.

...When we talk about the recession, usually we get these images of mass layoffs.

There are no jobs, but it's the complete opposite right now, just like it's kind of the complete opposite when it comes to the economy doing so well.

Obviously, we haven't seen those GDP numbers yet, but based on some factors, it seems like things are going well, but things can obviously change later in the year, like you're talking about Joey, but tell me what you think about our current unemployment rate here in the state, which, which is at 3.4%.

As of March, we've had our biggest labor force ever.

What does that signal to you?

We are well positioned, it seems like should there be a downturn later this year or next year.

Joey>> Very much so, and South Carolina's economy is doing very well and the labor market is strong, as you mentioned, 3.4% unemployment.

We see unemployment insurance claims back down below where they were before the pandemic began, and the labor force is going strong as well.

So, we are in a very good position.

...I come back to that job openings rate, because that really does give us some insight into how well, we are doing.

So, the job openings rate currently is around 7%, meaning that if we look at - and that's just a measure of out of the total number of jobs in the economy, how many are currently open and unfilled, and normally, we would expect that to be around 5% given our current rate of unemployment.

So, it may begin to come back down, because employers when the economy slows, normally, they're going to just pull down their their job postings before they actually layoff existing workers, when they see a pullback in demand.

So, we would expect the job openings rate to come back down first.

If it...gets down below 5%, that's when we begin to get a bit concerned that layoff activity may be coming, and we may be headed more towards a recession, but right now, things are looking very strong, and again, it's all eyes are going to be on the Fed in the coming months.

Gavin>> Speaking of the Fed, Joey, I want to talk about these interest rates that will be going up like we said that we've already seen them go up so far, and we expect them to go to 2.25% or 2.5%, by the end of the year.

Can you tell me about just the ripple effects this will have on certain parts of the economy, specifically jobs?

We are talking about looking at those job rates and the openings.

What part of the economy, what part of jobs in our economy would be affected by these increases in rates?

Joey>> Well, I think early on and in the next several months, we're likely to see it have the biggest impact on construction markets.

We've already seen a pretty sizable increase in mortgage interest rates just since the beginning of the year, of about two percentage points or so, and that's coming off of just 25 basis points from an increase in terms of the increase in the federal funds rate, and what that shows is that banks and financial institutions are anticipating further interest rate hikes and they are pricing that into their mortgage loans, and that has an impact on housing affordability, and it could cool the housing market somewhat as we move into the summer, and that's a challenge because demand has been strong but inventory levels are still very low.

So, in the housing market, we've got two specific factors that are driving the increase in prices and the high level of activity that we're seeing right now, but I think in the short run when we look at these rate hikes, the construction market is the one to keep our eye on the most because of its impact on these mortgage interest rates.

Gavin>> Which, like you said, will lead to somewhat of a cooling you think on the housing market, especially since we've seen housing prices jump 18.5% in South Carolina year over year.

Do you think we're going to peak there pretty much and maybe see a little drawback this year?

Joey>> It's possible, but I think we're definitely going to continue to see elevated house prices, and that comes from the supply side.

So, demand has been strong, but it's already pulling back a bit, and that's because consumer spending has been tapering as the federal stimulus has waned.

So, those stimulus checks and enhanced unemployment benefits and all the other tax credits that have helped prop up disposable income over the last year, and encouraged spending, including on housing that's beginning ...to wane now, and we're seeing that have an effect on on the housing market, but on the flip side, supply is so limited right now, that it's it's still hard to find hard to find a home if you're...a buyer looking in most markets, certainly, in South Carolina, and so that's going to keep prices elevated, even in the face of a pullback in demand.

Gavin>> Joey, just wrapping up with interest rates.

Again, you mentioned this a moment ago, but how fine of a line is it for the Fed to walk when it comes to raising these rates, and again, not, you know, drastically hurting the economy too much.

We have been seeing the markets get pretty rattled over the past few weeks here.

I know you're not a personal finance adviser, but what should people be watching for?

How should they be weathering this the next few months essentially?

Joey>> Well, I think in terms of the stock market, things are going to be very volatile for the next several months.

I don't think there's any question about that.

We've already seen seen that, as you mentioned in the last several weeks.

So, we have not only rates going up, but we have the war going on in Ukraine, and so, there's just a lot of uncertainty right now, and I think that's that's likely to continue, but I think for the average South Carolinian, keeping our eye on what the Fed says and what they are doing, because as they continue to raise rates, they're going to do it in a slow and steady fashion.

They've indicated that, but they are, at this point very committed to rate increases for the rest of this year trying to taper demand and walk that fine line, pull down inflation, which is really the biggest threat to our economy right now.

Gavin>> So, Joey with a minute left, can you just tell us again, what you're watching, what we should be watching for in the coming months, going forward, in 2022?

Joey>> So, a couple of metrics.

Number one, we want to be looking at GDP growth for the first quarter of 2022, which will come out this week, and that will give us some insight as to whether inflation is already having an effect on the US economy in terms of a significant effect for a pullback in demand or not, and then secondly, as we look towards the summer, all eyes are going to be on the Fed, because as they raise rates, they have a little bit of wiggle room to raise rates, pull back demand, and not lead to a recession or not not lead to any layoff activity, and so if they can successfully do that, then we should be in pretty good shape through the rest of this year because in general, South Carolina's economy is doing very well.

So those are the two elements to be looking for as we move forward to assess whether South Carolina's economy continues to perform well for the rest of this year, or if we see some pullback.

Gavin>> Gotcha.

A lot to be watching for.

That's Dr. Joey von Nessen.

He's a research economist at the Darla Moore School of Business at the University of South Carolina.

Joey, thanks as always.

>> Thank you, Gavin.

My pleasure.

Gavin>> Joining me now to discuss an alarming report on opioid deaths is Sara Goldsby.

She's the executive director at South Carolina's Department of Alcohol and other Drug Abuse Services.

Sara, thanks for joining us.

>> Thanks for having me, Gavin.

Gavin>> So Sara, let's start by talking about this report from DHEC, this 2020 report that just came out that found from 2019 to 2020, drug overdose deaths jumped by 59%, from 876 to 1400.

We've previously discussed how the pandemic was going to affect these rates, but tragically now we know, Sara.

So, tell us about this report.

Sara>> Yeah, Gavin.

So, I mean, you know, as always, when we look at those numbers, we know, every day that those numbers are people and that, you know, so they represent the lives, the families that have been impacted.

...So, it really is a heavy number to see, and unfortunately, with the week to week trends that we've been watching, as the Opioid Emergency Response Team looks at incidents of responses to overdoses, and how it's happening across the state and as real time as possible.

We unfortunately sort of saw this coming or predicted that the numbers would be this bad, and it's occurred for a couple of reasons as we've previously spoken about the isolation and the impact of the COVID-19 pandemic has certainly had people turning to misuse of alcohol and drugs to cope with the negative feelings and all of the experience of the pandemic, certainly, but also, what we've seen is an increase in the potency, the availability and the volume of illicit fentanyl coming into this state.

Perhaps some of the most deadly substances we've ever seen in the United States and in South Carolina with an unpredictable presence in the street drugs that are currently out there, and so, it's really just a tremendous shift in the opioid pandemic, as we've known it.

Gavin>> Sara, South Carolina saw a steady increase of drug overdose deaths since 2013, really, when everything started to pick up, unfortunately, in the state and the country, but DHEC's annual report found that from 2018 to 2019, overdose deaths only increased by 2.5%.

So, it seemed like things were slowing down before the pandemic may be stabilizing, because some of the measures that have been put in place over time.

So, do you think that these numbers right now this 59% jump, from 2019 to 2020 is a bit of an outlier?

Do you think things will stabilize maybe in the future?

Or how do you predict this going forward?

Sara>> Well, I just want to say I appreciate that, you note the 2018 to 2019 decrease because that less than 3% change was below the national average of the 5% increase that we saw that year, and so exactly what you said is true.

The tremendous work that we have been doing was paying off and we were seeing a change in the opioid crisis.

That being said, I think going forward because of the deadly nature of the substances that we're seeing now, the fentanyl that's being laced in cocaine, the fentanyl that's being laced in methamphetamine, the prescription pill look alikes that are not FDA approved or manufactured in the United States, but in fact, illicitly made and sometimes pure fentanyl, with these new products and the potency of these products being so widely available right now, unfortunately, I don't think that we are out of the woods yet, and we have a lot of work to do in new ways, because of the nature of the crisis changing with that substance.

Gavin>> ...Along those lines, do you think that a new generation of users and abusers have has cropped up because of the pandemic?

I mean, you were talking earlier about even what the CDC is predicting for 2021, as well?

Sara>> Well, I think during the pandemic, people who never would have otherwise used drugs or alcohol, or increased their use of alcohol or even other drugs, we saw that happen, and I think even with alcohol and other substances, we have yet to see folks who are hurting now turn to help.

So, it's hard to predict how many people are out there currently hurting.

The unfortunate nature of the substances, as I have said that are out there is that they are deadly, and so, any use can result in an overdose and can result in death, which is why this time, intervention services and prevention services are so critical in informing and educating the public about the potency of the substances that they might ingest.

Gavin>> Sara, can you elaborate that on that you're talking about?

They haven't turned for help yet?

Does that mean that there's a certain amount of time typically when...people are using and abusing drugs or alcohol that they think they can do it, but then they hit rock bottom at some point is that what you're seeing?

We haven't really seen this wave hit yet when it comes to treating these folks?

Sara>> Yeah, absolutely.

in particular, I think about certain populations, and especially our mothers who are working from home during the pandemic supervising children, and also working, turning to alcohol to cope with the added pressures of the day to day.

Those folks may still be drinking and not yet realizing that they have a problem, and so, as that use increases or changes with dependency over time, it may be a while yet before we see folks asking or turning to help, and so that is just one example, but there are many with other substances where folks may have increased use and may not yet recognize a problem or be ready for help.

Gavin>> Sara, as a result of this, opioid public health emergency our state has formed an emergency response plan.

There's an emergency response team, which you mentioned, and it's my understanding that y'all just met moments ago on Monday.

We're taping this Monday afternoon.

Can you tell us the latest, some actions that the team has been undertaking?

Sara>> Yeah, so you know, the most important thing is keeping people alive right now, and I think the wide accessibility of naloxone, the overdose antidote and the strategies to get that into the hands of anybody who might be at risk of an overdose has been critical.

We talked a lot today about our first responders responding to overdose.

EMS, law enforcement officers, firefighters, recognizing that they've experienced a lot of fatigue over the last couple of years for a number of reasons addressing COVID and addressing increased overdoses.

So, applauding them recognizing that they need our support more than ever, and just expressing a lot of gratitude for the lives that they save every day, and literally thousands of lives being saved annually with the distribution and administration of that overdose drug, overdose antidote.

Gavin>> Also, it sounds like they need more financial support as well, because it is becoming a lot for some of these departments across the state to supply it, to use it over and over again, in some situations for folks.

Is there any way?

Is there any additional funding from your understanding coming from the state, or other ways to help offset some of these costs?

Sara>> Yeah, so a lot of the programming that we've developed, especially for our law enforcement and firefighters, and then the community distribution has been supported by federal grants, and I think, as we go forward, recognizing our EMS and local responders need support with their resources.

We hope that some of the settlement funds from the opioid abatement strategies from the... settlements with the companies could support some of that work, and then of course, we'll always be looking for any grant opportunities to continue to support those programs.

Gavin>> ...Sara, we're wrapping up the legislative session right now, and I just want to ask you about anything that you're seeing or have been working on this year in terms of additional legislative remedies to help address the pandemic in the state?

Sara>> Yeah, so we've been working closely with legislators to let them know, and be aware of the issue and how it's changing.

There have been a couple of bills that have been introduced to help change our overdose laws, and that policy has gone, or overdose prevention laws, and that work has gone a long way.

I hope that next year, we can look at it, changing that even further, helping our school nurses have access to Naloxone.

...Then of course, there will be legislation that codifies the opioid settlement, abatement funds that we know will make big change for South Carolina.

Gavin>> Yeah, you mentioned that before and you're talking about that $26 billion dollar settlement with Johnson and Johnson and the nation's three major pharmaceutical distributors, Cardinal McKesson AmerisourceBergen, South Carolina is set to receive I think $300 million dollars of that over 18 years, starting this year.

Can you tell us-you mentioned some things, but where that... where most of that money might be going over that span of time?

Sara>> You know, to our knowledge, those settlements have some restrictions on the use of those funds, and they really have to be tied to opioid epidemic abatement strategies as we know them.

So evidence based practices on the continuum of prevention, intervention, treatment, recovery, and then some research.

And so, I think the specifics in those documents will be overseen by a board that will ensure that South Carolina uses those funds appropriately.

Gavin>> ...Sara, we talked about hospitals last time, I think we were discussing about how some hospitals don't necessarily follow the same protocols when they're discharging patients who maybe suffered an opioid overdose, or have dependency on opioids, and not giving them that, that life saving drug, Naloxone.

Are all the hospitals right now, as you know, on the same page when it comes to discharging...patients with these problems?

Sara>> I don't think they're on the same page, Gavin.

We've got some hospitals doing excellent work, especially in the care coordination.

We've got some hospitals treating addiction medically with those individuals who present in the emergency department with an overdose, and that's really the gold standard of care, addressing the overdose, quelling the cravings with medications right there in that setting, and then if not treating in their own health system, referring to a specialty local provider for that ongoing care, and really not just sending somebody with a brochure or a card as they walk out the door after an overdose, but engaging in a warm handoff.

>>We have about two minutes left Sara and I just want to ask you about prescribing in general.

Can you tell us maybe, are doctors still prescribing painkillers the way that they used to?

Is it... getting better from what you've seen based on monitoring and surveillance?

Are people getting wiser about maybe not necessarily needing these prescriptions and taking, you know, higher strength Tylenol or Ibuprofen, instead?

Sara>> Yeah, well, first, we have to say pain is real, and people do experience pain that must be addressed, but we have to applaud our medical community, because the rate of prescribing over the last six years has gone down nearly 23% of those narcotics for pain being dispensed, and so, I was just with the Medical Association last week, giving them a big round of applause and celebrating how the prescribing has gone down.

That being said, we still need our medical community to help us respond in a different way, and that is to treat addiction medically, to screen for it, to address it in primary care and acute care settings, and then to treat with medications when appropriate.

So, we still have a long way to go, but we have certainly seen changes in the prescribing in our state and we know that, that has made an impact on lives.

Gavin>> Sara, you were just talking about celebrating that accomplishment.

Can you talk to us about some accomplishments of folks that are in recovery in South Carolina and how they're handling this, and what programs are out there to help them continue on that journey?

Sara>> Yeah, we have a number of recovery community organizations sprouting up all over the state.

So far, in the last six months, those recovery community organizations have helped thousands and thousands of people maintain their long term recovery, and I think giving a lot of recognition and praise to those who have made it through the last couple of years.

We've heard some of our friends in recovery, say if you made it through the pandemic without returning to use, that's worth two years of recovery right there, and so, a lot of celebrating the resilience, the strength of those folks, and celebrating South Carolina growing these organizations to help those folks more and more.

Gavin>> Definitely, worth celebrating right there, too.

...Sara, really quickly, just some resources and websites for folks if they want to get additional information and resources.

Sara>> Sure.

So, we've tried to make the justplainkillers.com, the one stop shop for opioid information to include lots of data, lots of information on how to talk to your doctors and prescribers and just overall information and things to know about the opioid crisis as it's changed specifically in South Carolina and then we have our embracerecoverysc.org website that really shares what recovery is, the miracle of recovery, where recovery resources are and how to use the language of recovery so that we can continue to fight the stigma and into the bias of people who are experiencing substance use disorders.

Gavin>> Thanks.

And that's Sara Goldsby, Director of DAODAS.

Thank you, Sara.

>> Thank you, Gavin.

>> For South Carolina ETV, I'm Gavin Jackson.

Be well, South Carolina.

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