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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2022 Annual Theme: Stakeholder Capitalism
Market-Based Solutions to Vital Economic Issues

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Employment growth has remained exceptionally strong this year, and September is expected to be another healthy month. Join us for the Kenan Institute’s virtual press briefing at 9 a.m. EDT this Friday, Oct. 7, as we discuss the Bureau of Labor Statistics’ fresh employment report and how it may affect the Federal Reserve’s aggressive reaction to inflation.

Research by the institute-affiliated UNC Tax Center shows just six publicly traded U.S. companies, including Amazon and Warren Buffett’s Berkshire Hathaway Inc., would have paid half the estimated $32 billion in revenue generated by a 15% corporate minimum tax signed into law last month. “Who actually pays a lot is just not very many firms at all,” said Jeff Hoopes, Kenan-Flagler Business School professor and the center’s research director, who is one of the study’s authors. “My guess is it will not be the same firms every single year.”

UNC Kenan-Flagler Business School Professor Camelia Kuhnen was among a group of economists who answered questions for a survey on stakeholder capitalism by the Initiative on Global Markets at the University of Chicago Booth School of Business. Considering one statement – “Effective mechanisms for boards of directors to ensure that CEOs act in ways that balance the interests of all stakeholders would be straightforward to introduce” – Kuhnen objected strongly

A last-minute deal averted a rail strike last week, but it highlights how staffing shortages in the industry as well as in education, hospitality and healthcare are pushing workers to push back, writes The Washington Post. Jobs with long hours and rigid schedules that lack competitive pay and benefits are proving the most difficult to fill, Director of Research Paige Ouimet said. “Running your workers like this – asking them to do 20, 30 percent more because you’re short staffed – it’s very much a short-term strategy,” Ouimet said. “You’re going to keep losing people.”

A new personal gift from Bruce Van Saun, Citizens Financial Group Inc. chairman and CEO, and his wife, Kathleen (Katie) Van Saun, will support the Kenan Institute’s annual grand challenge. Starting in 2023, the three-year gift will support the institute’s Distinguished Fellows, who advance thought leadership around the grand challenge’s theme, a key issue that affects business and society. The program is making its debut this year with an exploration of stakeholder capitalism and ESG investing. The Van Sauns earned their MBAs from UNC Kenan-Flagler Business School in 1983 and were married in 1985.

Labor force participation rose in July and again in August, providing the Federal Reserve a victory in its efforts to boost participation rates closer to pre-pandemic levels, Barron’s reports. Rising prices may be sending some people back to the job market, Chief Economist Gerald Cohen told the publication. “There are help wanted signs everywhere and so you can get to the point where [people] are saying, look there are opportunities out there and let me go take advantage of them,” he said.

Bradley Staats, UNC Kenan-Flagler Business School professor of operations and faculty director of the institute-affiliated Center for the Business of Health, spoke to The Well about Amazon’s next move in health care. The online retail giant announced in July that it was acquiring primary care provider One Medical and will now shut down its Amazon Care telehealth service. Staats and co-author Robert S. Huckman recently wrote in Harvard Business Review about three key components to Amazon’s playbook for entering new businesses.

Blouin, a member of the Kenan Institute Board of Advisors, told Knowledge at Wharton that proposals to levy a 1% excise tax on corporate share buybacks and a 15% minimum tax on corporations that report more than $1 billion in book profits or in their financial statements were ill-conceived and based on misconceptions of corporate behavior.

The Fed is threading a shrinking needle in its attempts to engineer a soft landing for the U.S. economy. Join Professor Greg Brown for a briefing built on the latest employment data and financial market signals, followed by his answers to questions from the audience.

The cost to rent a one-bedroom apartment in Raleigh and Durham jumped 6% in a month as the area continues to attract new residents, according to a WRAL TechWire report. Rising prices are an indication of an undersupply in homes for rent or sale, said institute Chief Economist Gerald Cohen, adding that this “suggests that the risks of a significant drop in housing is quite low.”

Small-business owners say they’re just beginning to recover from the sudden blow that hobbled many of them during the early 2020 pandemic restrictions. Now mixed economic messages have them wondering what to do next, according to a Washington Post story. “There is so much that’s up in the air, and uncertainty affects small businesses much more so than it does larger ones,” said institute Director of Research Paige Ouimet.

July employment numbers suggest that the economy isn’t heading into recession but instead is accelerating as the third quarter begins, Chief Economist Gerald Cohen said during the institute’s monthly economic briefing Aug. 5. “It’s still post-COVID recovery, but … we’ve surpassed the pre-COVID levels by 32,000,” Cohen said, as reported by the Triangle Business Journal.