SBJ 02-2011 by The Southern Illinoisan

FEBRUARY 2011

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Inside F E B RUA RY |

ELDER ISSUES Planning ahead: Columnists Scott McClatchey and Richard Habiger both write this month on topics of great importance to seniors and those approaching their golden years. McClatchey offers eight easy-toremember steps that are the cornerstone for effective retirement planning. Habiger takes a closer look at the recent and tragic shooting spree in Arizona as a reminder to consider advance-care planning, including Power of Attorney for Property, Power of Attorney for Life, Living Will and Advance Medical Directive. Page 6

STATE FOCUS Tax hike only a start: The state’s new income tax rates are taking a bigger bite from our paychecks and causing much grumbling. But Columnist J. Fred Giertz says the largest increase in Illinois history has the potential to create serious competitiveness problems for the state. No healthy state would willingly increase its income tax rate by 66 percent. But if a tax increase had not been approved, the state’s fiscal future would have been in real doubt, and this would have had dire consequences for business. The crucial question facing the state after the tax increase is whether spending can be controlled. Page 9

EMPLOYMENT LAW Executives may be exempt: Columnist Ed Renshaw continues his recent overview of the laws governing

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“exempt” employees — those not bound by the wage and overtime standards of the Fair Labor Standards Act. Executives are such employees, but they must meet certain criteria to be classified as executives. For examples, the executive exemption has a minimum salary requirement: An employee must make a minimum of $455 per week ($23,660 per year), and that salary cannot be calculated as an hourly wage. It must be a straight salary or fee. If an employee doesn’t make that much money, he or she cannot qualify for the executive exemption. Page 11

INDICATORS Still room for improvement: Unemployment fell in 11 of the 18 Southern Illinois counties during November, the last month for which complete statistics were available. That’s encouraging, but the decreases were far less than 1 percent, four counties reported unemployment increases, and two more were unchanged from October. The doldrums continued to plague the new vehicle and home sales sectors, too. Just five counties reported increases over the previous month for both new vehicle and home sales in November. Pages 12-13

Architechniques, Ltd. .......................... 3 Carbondale Civic Center ...................... 7 Custom Cleaners .............................. 17 DataLock .......................................... 15 Feirich, Mager, Green & Ryan.............. 17 Ferrellgas ............................................ 3 Glass Haunt ...................................... 19 Jim’s Mobile Offices and Homes .......... 7 John A. Logan College ........................ 20 Oliver and Associates, Inc. ................ 10

ACHIEVEMENTS Learn the latest: Find out who has been hired, who has been promoted or who has received an award for their efforts in business. Make sure you check out our newest “Faces in the news” collection of business portraits. Pages 17-19

Pepsi MidAmerica .......................... 8, 15 Raymond James Financial Service ...... 7 Silkworm Inc. .................................... 17

Contact us SIU Credit Union ................................ 24 The Southern Business Journal is a publication of The Southern Illinoisan. Contact us via mail at 710 N. Illinois Ave., Carbondale, IL 62901, or at P. O. Box 2108, Carbondale, IL 62903. Also reach us on the Web at www.sbj.biz and via e-mail at SBJ@thesouthern.com. The Journal is published 12 times per year monthly, and

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FEBRUARY 2011

Cover Story

Wanted: Leaders who will make Southern Illinois great

SIUC impact on region is huge BY LES O’DELL SBJ CORRESPONDENT

Every day, headlines and news broadcasts tell of events and happenings at Southern Illinois University Carbondale, from talk of layoffs or budget shortfalls to good news including athletic success or new research discoveries. Often, it is easy for individuals without a direct tie to the university to downplay or disregard what happens on the campus. Yet, many area analysts and business leaders say that without the university, the local business climate would be much different. More than 7,000 local residents are employed by SIUC, and tens of thousands of students from around the globe choose to attend the university. The impact of those salaries and tuition dollars is significant, said Scott Gilbert, associate professor of economics at Southern. “It’s hard to think of very many businesses, especially in Carbondale and the surrounding communities, that are not directly affected by SIUC,” he said. “Every storefront, for example, is selling to people that are students, faculty or staff, and while not every business is as sensitive to what happens on campus as others, on the whole, the university is such a large part of

the economy, there is no business that is not influenced by SIUC.” Gilbert says that the most affected businesses, naturally, are retail stores, rental companies and restaurants that particularly cater to the student population. However, he points to other non-student businesses that also rely on the institution for business. One example he gives is a farm supply store. While such a retailer may not rely on students, it does serve faculty and staff with items such as gardening supplies, which are purchased with dollars earned by employment at SIUC. “There are indirect effects in lots of industries, as dollars are handed down from students or staff to restaurant owners to the grocery stores to the banks and sporting goods retailers and as those dollars make their way around the region,” he explains. So, how many dollars are there flowing from the university throughout Southern Illinois? “As far as I know, no one has been able SEE COVER / PAGE 4

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Do you know of a leader who is working to make Southern Illinois a better place to live, work and get an education in the coming years? We are seeking nominees for Southern Business Journal’s “Leaders Among Us Class of 2011.” For this year’s honorees, we are seeking visionary leaders. They may be established, veteran leaders, or they may be forward-focused newer leaders who see our region as a special place for opportunity, prosperity and growth. Perhaps they will be excited by the planned destination development in Marion and planning a complementary venture. Or, they might be involved in our region’s tourism industry, which relies on the growing popularity of our vineyard and wineries, Shawnee National Forest, rental cabins, golf courses, Southern Illinois University athletics and events, and our towns and their various specialty stores. Perhaps they will be involved in some other sphere of culture, commerce or community involvement. This is your invitation to tell us about that special person. Perhaps they are essential for volunteer efforts offered through churches, civic groups or schools. They may also be outstanding performers at work, but we’re looking for those who excel beyond their careers. Some may be well known and recognized by many as leaders who will serve Southern Illinois through several generations. Others are likely to be behind-the-scenes stars, the human engines powering great initiatives, who are both willing and able to serve as top leaders. Every spring for the last seven years, we have honored a group of people from across Southern Illinois — more than 100 outstanding people. It’s easy to help us get started in this search for leaders. Just look around your community and identify those folks who are leading and succeeding. Please e-mail your nominations to gary.metro@thesouthern.com and include the nominee’s name, occupation, a description of the person’s community work and a few sentences on why you believe the honor is deserved. Please include your telephone number, too, in case we need more information. Please submit the information before March 1. Those chosen for the Class of 2011 will be featured in a glossy, full-color magazine to be published in early May. The Class of 2011 will be honored and given their awards at the Community Leaders’ Breakfast on May 5 at John A. Logan College.

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FEBRUARY 2011

Cover Story FROM PAGE 3 to tell recently how much the impact is in terms of dollars,” says Debbie Moore, executive director of Carbondale Convention and Tourism Bureau. Gilbert says economists use a multiplier to determine the true effect of expenditures. “There are complex methodologies that follow the whole chain of events,” he says. The last study of SIUC’s impact on the entire Southern Illinois region was completed in 1993. It used a multiplier of 1.78, meaning that every dollar generated or spent by the university turned into $1.78. An earlier study that focused only on nine Southern Illinois counties showed a multiplier of 2.86. Using either figure, it’s easy to see how the university can benefit the region. According to figures released by SIUC for the 2009 fiscal year, which ran from July 2008 to June 2009, operating funds for the entire Southern Illinois University system (including the Edwardsville campus and the Springfield-based medical school) topped $582 million. In that same year, students on the Carbondale campus received more than $263 million in financial aid. While a large portion of financial aid pays tuition and related charges, much of that money pays for students’ rent, groceries, furnishings and supplies. In a guest editorial earlier this year in The Southern Illinoisan, SIU President Glenn Poshard put the university’s buying power at “hundreds of millions” and said that budget problems at the institution had cost the local economy millions. Carbondale Assistant City Manager for Economic Development and Director of Development Kevin Baity carefully watches what happens at SIUC. He says the impact stretches far beyond his city. “When you look at the number of people that come into town on a daily basis — instructors, students who commute, and others — we consider our daytime population to be as many as 55,000,” he says. “Without the university, the landscape would be very different. We would not have the major retailers, the restaurants or retail base at the level we have. In many ways, we are insulated from the national economy because of the university.”

He says that’s true not only for Carbondale, but for other communities in the region as well. George Trammel agrees. Trammel, the executive director of Marion Chamber of Commerce, says SIUC benefits his community, as well. “It pays wages to people who live here, and it gives us another tool to attract business to the area,” he says. “It is an asset to us.” Trammel adds that the proximity of the university was key in drawing Aisin to Williamson County. The automobile parts manufacturer has become one of the region’s largest employers. Other community leaders say even the region’s small retailers benefit from SIUC. “Students have a significant shopping impact on the area,” explains Darryl Jones, owner of Splattered Ink and president of Murphysboro Chamber of Commerce. “Whether they are buying furniture to put in their dorms and apartments from Sis’s Memories or if they are eating at 17th Street, the students provide a significant boost to the economy.” Jones also points to the high number of visitors that come to the region because of the university — and the dollars they spend while they are here. “The university also brings traffic throughout Southern Illinois, visiting lecturers, educational conference attendees and presenters and, of course, the parents and family of the students,” he adds. “This influx of people impacts the local economy for our small businesses.” Moore says a number of university events including homecoming, athletics and, of course, graduation, are big draws. “It’s difficult to tell exactly what the impact of these events is, but they certainly fill hotel rooms in Jackson and Williamson counties and sometimes even Union County. Depending on how graduation is scheduled, that weekend can fill hotel rooms all the way up the interstate to Effingham. It is significant,” she explains. “The events benefit more than just hotels and restaurants. We track pretty closely the business that goes on in places like orchards and wineries. They always have increases in their weekend counts when there are special events on campus. You can see the bump in sales tax revenue, as well.” Other special events, such as concerts

STEVE JAHNKE / SBJ

‘It’s not just a money impact,’ says Scott Gilbert, associate professor of economics. ‘The institution generates college degrees and educated people that go out and enrich our communities. We’re not only talking about dollars and cents, but the future of our young generations. That has long-term effects in helping our area for decades to come.’

and plays, draw from a wide region, too. “We combined the mailing lists of Southern Lights Entertainment, Shryock Auditorium and the SIUC Department of Theater, and had that plotted on a regional map,” explains Bryan Rives, director of Event Services for SIUC. “When we looked at it, it wasn’t just Carbondale that people were coming from; it was all over Southern Illinois.” He says those trips to campus translate into off-campus spending. “When somebody travels from farther away, they’re going to have to get here, buy gasoline, have dinner and maybe use hotel rooms. When parents come to visit, they’re also probably taking their students out shopping.” Gilbert is quick to point out that the benefit of having the university goes beyond economic concerns.

“It’s not just a money impact,” he says. “The institution generates college degrees and educated people that go out and enrich our communities. We’re not only talking about dollars and cents, but the future of our young generations. That has long-term affects in helping our area for decades to come.” Trammel says graduates from SIUC provide a knowledgeable workforce for employers in practically all fields, and when they find work outside of the area, there still is benefit. “When they go away from here, they still are from Southern Illinois — that’s what their diplomas say — and they represent the whole region.” LES O’DELL of Carbondale is a regular contributor to Southern Business Journal and The Southern Illinoisan.

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Illinois Small Business Development Center/International Trade Center Spring 2011 Workshop Schedule Starting a Business in Illinois This two-hour informational seminar cover the basic requirements of starting your own business including: legal structure, start-up requirements, finding financing, and business planning basics. • Wednesday, February 9: 1pm - 3pm (Dunn-Richmond, Room 150) • Thursday, February 24: 9am - 11am (Chester, Randolph County Courthouse - 1 Taylor St.) • Friday, March 11: 9am - 11am (West Frankfort, Sam Mitchell Law Building - 115 E. Main St.) • Wednesday, March 30: 9am - 11am (Dunn-Richmond, Room 150) • Tuesday, April 12: 1pm - 3pm (Herrin, Chamber of Commerce* - 35 Park Ave, Suite A) • Wednesday, May 11: 6pm - 8pm (Dunn-Richmond, Room 150) • Tuesday, June 7: 9am - 11am (Marion, Man-Tra-Con** - 3000 W. DeYoung St., IL Centre Mall) *Co-sponsored by the Herrin Chamber of Commerce. ** Co-sponsored by Man-Tra-Con

Finding Financing • Wednesday, May 11: 2pm - 4pm (Dunn-Richmond, Room 150)

Intro to Government Contracting • Thursday, February 24: 11am - 1pm (Chester, Randolph County Courthouse - 1 Taylor St.) • Wednesday, May 11: 4pm - 6pm (Dunn-Richmond, Room 150)

International Trade: Are You Ready to Export? • Wednesday, March 30: 11am - 12pm (Dunn-Richmond, Room 150)

International Trade: Current Trends in Exporting • Thursday, February 24: 1pm - 2pm (Chester, Randolph County Courthouse - 1 Taylor St. )

TO REGISTER Workshop location is the Dunn-Richmond Economic Development Center, 150 E. Pleasant Hill Road, Carbondale, unless otherwise noted. Pre-registration is required for all workshops. To register for any of these workshops or for more information, please call 618.536.2424 or email sbdc@siu.edu or visit our website at www.siusbdc.com.

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FEBRUARY 2011

Elder Issues Tips for retirement planning: Eight steps to get you started on the right foot BY SCOTT MCCLATCHEY SBJ CONTRIBUTOR

Planning financially for retirement may feel overwhelming. For some, that feeling is what keeps them from really focusing on and implementing a plan. If you haven’t McClatchey started planning for your retirement, do yourself a favor and begin today. Here are some other ideas to help you get it done properly: The earlier the better. Time is definitely one of your greatest allies. A person who begins contributing a modest amount to a retirement plan in their early 20s could end up on par with someone who contributes much more aggressively but does not start until their mid-30s. Even if you have to start small, start now. Whatever amount you can afford to set aside for later, do it, and let it grow. If you don’t have the luxury of starting young, don’t waste time worrying about it. Start now. You’ll never again be younger than you are today. Be smart about what you’ll need.

Yes, it’s true, the senior discount is alive and well, and the general cost of living may be less for those who have retired. But, don’t forget, there are other costs to consider. Your health care costs, for example, may be greater in retirement simply because you’re not as healthy as you were in your youth. Additionally, you’ll want to take inflation into account. If you plan your retirement based on the cost of living and income of your 30s, by the time you hit your retirement years, you may find you greatly underestimated your needs. How long will you need it? When Social Security was being developed, in the 1930s, a male retiring in the U.S. was really only expected to live about 12 years past his date of retirement. However, the average life expectancy of a U.S. citizen has risen fairly steadily throughout the last 50 years. Depending on when you retire, you may need to plan for 20 or more years of income. Take advantage of tax-deferred contributions. It sounds like a no-brainer, but sometimes people determine how much they can afford to contribute to a retirement account based on their net income, rather than their gross income. You may decide you can afford only $50 less per paycheck, net. But, remember that

some contributions, like those to your 401(k) for example, may be made with pre-tax dollars. That means you can afford to contribute a bit more from your gross income and still only “miss” $50 from your net income. This is an important consideration. Take advantage of matching contributions. If your employer offers a 401(k) match, consider scrimping here and there in order to take maximum advantage of it. It’s a very positive domino effect. The more you contribute, the more you earn in matching contributions (up to the maximum allowable amount). Think of it this way. If your employer offers a 50 percent match, then for every $100 you don’t contribute, you’re missing out on $50 in “free money.” You’re also missing out on the growth potential of that money as well. Do the math. This might be the most important retirement tip of all. Block off some time to sit down and do some calculations. Consider the different levels of contributions you could make and calculate how far those could take you by the time you reach retirement. Once you see what you could achieve, you may be more motivated to increase your contributions. Trim the fat.

Keep careful track of your spending for one month (if you bank online, you may have access to tools that help you do this). After one full month, sit down and take a careful look at what you spent money on. Did it all make sense? Was some of it frivolous? Any regrets? Taking a close look at exactly where your money is going is often the best way to discover areas that need improvement, and ways you could adjust your spending habits. Add up all the money you feel you spent unnecessarily, then add that amount to the contribution math you did previously. How much further might that extra monthly contribution have taken you? Get help. These retirement tips are intended to help you get started down a path toward, potentially, a more successful retirement. But they’re just that — a starting point. While it’s definitely important to educate yourself and understand your finances, seeking the assistance of a financial professional may be one of the best moves you could make. SCOTT MCCLATCHEY is a founder and LPL financial advisor with Alliance Investment Planning Group, a Carbondale-based investment firm located at 115 S. Washington St. He can be reached at 618-519-9344 or scott@allianceinvestmentplanning.com.

Tucson shootings and long-term care BY RICHARD HABIGER SBJ CONTRIBUTOR

The Tucson shooting of U.S. Rep. Gabrielle Giffords and others is still fresh in our minds weeks later. This tragedy should serve to remind us all of the necessity of advance-care Habiger planning. For those who have signed a Power of

Attorney for Property, Power of Attorney for Health, Living Will and Advance Medical Directive, it is a reminder of why they have executed those documents. It also should be a reminder of why their children, grandchildren and all of their loved ones, who are 18 years of age or older, need to sign these documents. Now! Sometimes serious medical events are completely unexpected. Having the right legal documents in place when these unexpected events occur could mean the difference between a bad outcome and a not-so-bad outcome — perhaps even a good outcome.

The Virginia Tech shootings were a recent illustration of parents being unable to get information about their “adult” children because the children had not gotten around to signing powers of attorney for health care. And, who can forget the Florida case of Terri Schiavo and what can happen if a person does not have a written advance medical directive? Or, the more recent case of Anna Nicole Smith, who did not put her funeral wishes in her will or a “separate writing.” Or, recall the tragic case of a young Missouri woman, Nancy Cruzan, which consumed a loving father when he was faced with an

inability to “help” his daughter remove death-delaying machines due to the machinations of an ambitious politician and a court system that failed in its obligations to do justice. The Tucson shootings also remind us of the importance of “having the talk” with our families, to discuss our wishes so that our designated decision-makers can function more capably as health care agents in the event of a sudden medical challenge down the road. All of us can use these unfortunate opportunities to bring SEE HABIGER / PAGE 14

FEBRUARY 2011

SOUTHERN BUSINESS JOURNAL

Entrepreneur’s Mailbag The essential question: Can Illinois tap its inner entrepreneur? BY CAVANAUGH L. GRAY SBJ CONTRIBUTOR

The four years I spent in Washington, D.C., taught me something very important about myself. That realization is that I am not cut out for politics. With Gray Illinois’ recent decision to raise taxes, I have chosen to break my vow of political silence and throw my two cents into the discussion. At times, I will use real-world examples in order to relay important small-business concepts. The state’s tax hike presents another case study for small businesses

and poses the question, “Can Illinois channel its own inner entrepreneur as it looks to move forward?”

What we know By now, we have all heard the details. On Jan. 13, a 67 percent personal income tax increase took effect, raising the rate from 3 to 5 percent. In addition, Illinois businesses will see a 46 percent increase as rates go from 4.8 to 7 percent. Though not the most expensive place to live or do business, the increases represents one of the largest increases in terms of percentage. With Illinois’ budget woes said to be in the $15 billion range, the taxes are expected to bring in an estimated $6 billion.

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Indiana Gov. Mitch Daniels has compared Illinois to “The Simpsons,” calling the Land of Lincoln “the dysfunctional family down the block.” With other states suffering the same unemployment fate, competition for jobs among neighboring states has heated up. Does this now mean that Illinois businesses are ripe for the picking? With a great tourism network, now is a good time for the state to go on the offensive, determining what makes our state great from an everyday live, work and play point of view. In small business terms, what is the state’s competitive advantage? If we can’t determine and communicate this properly, then how do we expect businesses to want to relocate here or, better yet, stay?

Some states are hiring sales reps with the goal of luring away Illinois companies. Other states, like Wisconsin, are rolling out new ad campaigns aimed at attracting Illinois businesses. Wisconsin’s new campaign reads, “Escape to Wisconsin. You are welcome here.” Ouch! Some of the more memorable ads I have come across recently have not been from social networking companies, consumer goods makers or auto manufactures, but have come from individual states. Iowa, Michigan, Virginia and a rebuilding Louisiana have done a great job placing their messages in the right places and are getting noticed by the right people. One state’s ad covered three pages in the Wall Street Journal; something tells me that SEE GRAY / PAGE 11

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State Focus Taxes bumped up, but more needs to be done to stop reckless state spending BY J. FRED GIERTZ SBJ CONTRIBUTOR

At the end of 2010, the state of Illinois faced a monumental budget problem amounting to a shortfall estimated at $15 billion — made up of the current year deficit plus a Giertz huge overhang of unpaid obligations. Unlike past years, the governor and General Assembly chose to act by passing a huge tax increase in the waning hours of the 96th General Assembly in early January. For eight years, Illinois state leaders turned a deaf ear to warnings about the looming fiscal crisis that their actions were creating. Year after year, spending exceeded continuing revenues with the state financing the deficits with various temporary expedients including borrowing, pension underfunding and, finally, by simply not paying its bills. Neither tax increases nor serious spending cuts were implemented. Over the years, fiscal imprudence became the norm, but this time there was a difference. Capital markets through bond underwriters sent a clear message to the state that things had to change. The state of Illinois, with one of the lowest bond ratings in the country, has been facing a 2 percentage point premium when it borrowed, compared to low risk jurisdictions. With a threatened downgrade from rating agencies, this premium was set to rise. If borrowing continued to be used to finance current operations, Illinois would have slid into a downward spiral that was compared to the plight of small European countries, such as Ireland and Greece, facing unmanageable debt loads. After years of timidity, the governor and the Democratic leadership in the General Assembly cobbled together a large income tax hike with individual

rates rising from 3 percent to 5 percent and the corporate rate from 4.8 percent to 7 percent. With the additional 2.5 percent personal property tax replacement rate, corporations face a combined rate of 9.5 percent. This rate is among the highest in the nation and, combined with the federal rate, one of the highest in the world. The tax is billed as temporary, with rates scheduled to fall in four years and again after 14 years, although many are skeptical as to whether these reductions will materialize. This was a pure tax increase with no reform. The tax base was not broadened; there was no relief for low-income taxpayers; and, there was no additional property tax relief. Sometimes tax increases are coupled with reforms, but not this time. Further, the tax increase was not coupled with spending increases that are often used to buffer the impact of higher taxes. We have become familiar with the term “tax-and-spend liberals.” However, in Illinois the order was reversed since spending occurred before the taxes were imposed. The tax increase may prove a difficult sell for the Democratic Party (the tax was approved with no Republican support) which must defend a higher tax, along with further spending cuts, since the new tax revenue will not fully close the deficit. Illinois citizens have become accustomed to the something-fornothing philosophy employed by former Gov. Rod Blagojevich, who promised continuing spending increases with no tax increases, regardless of the longterm fiscal impacts. Blagojevich is no longer around to suffer the political consequences of his imprudence, but his party is still in power. It would be easy to reject the massive tax increase out of hand. This is the largest increase in Illinois history and has the potential to create serious competitiveness problems for the state. No healthy state would willingly increase its income tax rate by

Illinois citizens have become accustomed to the somethingfor-nothing philosophy employed by former Gov. Rod Blagojevich. 66 percent. However, the choice confronting the state was not between a well functioning state government with low taxes and one with a much higher rate. The real choice involved a low-tax state on the brink of insolvency. Businesses are concerned about high taxes, but they also worry about an unstable, unsustainable fiscal climate. If a tax increase had not been approved, the state’s fiscal future would have been in real doubt and this would have had dire consequences for business. The crucial question facing the state after the tax increase is whether spending can be controlled. The Republicans and the business community wanted spending restraint to be addressed first before higher taxes were considered. The Democratic leadership chose to tax first. In reality, the budget problem is so large that feasible spending cuts alone could not have solved the problem. This suggests that the budget crisis is not over. The additional revenue from the tax increase will not solve the state’s long-term fiscal imbalance. Spending discipline is needed. Richard Nixon once said the most dangerous time in a crisis is when you think it is over. This may well be true now in Illinois. If the governor and General Assembly believe the tax increase solved the state’s budget problem and go back to their old spending habits, the extra revenue will provide only a brief respite from the crisis, and it will return with a vengeance. On the positive side, the tax increase legislation did not provide for additional spending and included a weak provision that would negate the tax

Find more business news at www.sbj.biz. increase if spending increased markedly in future years. The real test will be if the discipline that it took to increase taxes can be carried over to spending restraint. Past experience is not encouraging in this regard, but there is at least hope. J. FRED GIERTZ is a professor of economics within the University of Illinois’ Institute of Government and Public Affairs. He can be reached at 217-244-4822 or jgiertz@ad.uiuc.edu.

SOUTHERN BUSINESS JOURNAL

FEBRUARY 2011

Family Matters The ties that bind can help a family stay healthy together BY BRIAN HARRISON, M.D. SBJ CONTRIBUTOR

Being a healthy family in today’s world means working together. It seems like everyone is stressed out these days, especially families. If parents are not worrying about Harrison money, they’re worrying about their kids. They’re working so hard to provide, they’re not really present even when they’re at home. The kids’ numerous school and social activities keep them so busy, they’re not around much either. Daily life settles into a disorganized

mess and, before we know it, the entire family is suffering from an overabundance of unhealthy habits and stress. Eating out becomes the norm because there’s no time to plan, prepare and clean up a meal. It’s easier to let the kids go off to their room and play video games all night when we’re too tired or have too much to do. Truthfully, families will probably always feel like they can’t keep up. It’s difficult to practice good time management when four or five people are running in different directions. However, a simple back-to-the-basics approach may be the best way to not get lost in the hustle and bustle of everyday life. “Getting back to being a family,” not just individual members of a household, is a good mantra to adopt towards working together to change the cycle of

unhealthy living. You don’t necessarily have to eliminate all of the extracurricular activities; just make a commitment to live healthier lives. If you’re dedicated to a cause, the issue of time will work itself out. And there’s strength in numbers.

dinner time as a chore; look at it as an opportunity for communication and involve the whole family. For example, no video games or television while everyone else works. Give the kids tasks suited to their age, and use the time to talk. It’s a great way for the family to interact and make memories.

The family that eats together Dinner time can be one of the most rewarding and beneficial activities for a family. First, you control the menu. You can watch calories, control portions and make healthier choices about what you eat, while teaching your kids to do the same. But, the benefits aren’t only nutritional. Staying home for dinner five nights a week instead of eating out saves money, which can help alleviate financial stress. And, don’t look at

The family that plays together Physical activity is an important part of maintaining good health. It’s something we can easily nudge out of lives because we just can’t find the time. A good way to accomplish this is to find a physical activity in which the entire family can participate. When it’s cold outside, maybe this means establishing a bowling night or setting SEE FAMILY / PAGE 16

FEBRUARY 2011

SOUTHERN BUSINESS JOURNAL

Employment Law Employees who are executives may be exempt from minimum wage and overtime requirements BY ED RENSHAW SBJ CONTRIBUTOR

Renshaw

In the last two months, we’ve discussed two categories of employees who are exempt from minimum wage and overtime requirements under the federal Fair Labor Standards

Act. Not surprisingly, these employees are referred to as “exempt” employees. Exempt employees generally must qualify as executive, administrative or professional employees. (Certain computer workers and outside salespeople can also be exempt even though they don’t really fit into the three qualifying categories.) Last month, we looked at factors that make an employee exempt as an administrator. The month before that, we did the same analysis of the professional exemption from minimum wage and overtime requirements. This month, we’ll address the final category: the executive exemption. It is important to remember that just like the professional and administrative exemptions, the executive exemption has a minimum salary requirement. That

means the employee must make a minimum of $455 per week ($23,660 per year), and that salary cannot be calculated as an hourly wage. It must be a straight salary or fee. If an employee doesn’t make that much money, he or she cannot qualify for the executive exemption. On the other end of the salary analysis, an employee may be exempt if the employee makes more than $100,000 per year, even if his job duties would not qualify him for the exemption. This type of employee is considered to be so “highly compensated” that overtime and minimum wage rules do not apply. Keep in mind, however, that the highly compensated exemption does not apply to employees engaged in “blue collar” jobs involving repetitive physical labor or production-line work. Once it is established that an employee’s salary meets the required minimum, an analysis of the employee’s job duties is necessary to determine if he or she is truly performing as an executive. Simply put, an employee will qualify for the executive exemption only if the employee is performing primarily non-manual, office work. This doesn’t mean he has to be in an office, but it certainly means he or she must be doing work or making decisions that involve managerial, intellectual or administrative expertise. Under the executive exemption, the primary duty of the employee must be management of the business or a

GRAY: Entrepreneur FROM PAGE 7 state was serious about getting its message across. It’s time for Illinois to up its marketing efforts because everyone else seems to be doing so.

Innovate new programs What do Hollywood Video, Borders Books and Office Max/Office Depot all have in common? Somewhere along the way, each organization forgot how to innovate. As a

department/subdivision of the business. This means the employee must supervise at least two other employees and must have authority to hire, fire and promote employees. However, even if the employee does not have the ultimate authority to hire, fire and promote, the employee may still qualify if his or her recommendations are given great weight and are usually followed. The U.S. Department of Labor defines the “primary duty” of an employee to be the employee’s principal, main, major or most important duty. This does not necessarily mean simply the duties on which the employee spends the most time, although time spent on managerial duties is an important factor. Generally, if an employee spends more than 50 percent of his time performing managerial work, that employee will qualify for the executive exemption. But, not spending 50 percent of your time on managerial duties does not automatically disqualify you from being classified as exempt. Other factors can be considered as well. If the managerial duties are highly important to the business operation or the employee is virtually free of any direct supervision, the employee may be exempt. For example, a night manager at a convenience store may spend most of his time doing non-managerial tasks with other employees, but that night manager might be exempt his or her decisions are

result, they are either nonexistent or no longer relevant in the marketplace. With a sizable budget deficit, I understand that there isn’t a lot of money to be tossed at new programs. However, this shouldn’t stop the state from trying or at least taking a page from the playbook of other states. Virginia is aggressively doling out cash and business incentives to lure job-creating businesses. To date, the state has raised a $57 million economic development package, with Gov. Robert McDonnell requesting another $54 million for the program. Virginia has managed to implement this program, while closing a $4.2 billion budget deficit. Depending on where you sit on the issue, you are either steaming mad about taxes being raised or you see it as

important to the business and are largely made independently. The U.S. Department of Labor provides a list of duties that are considered to be executive or managerial. These include interviewing, hiring and training employees; setting rates of pay and hours; planning work schedules; maintaining production or sales records; handling employee complaints; disciplining employees; preparing budgets; monitoring legal compliance issues; determining equipment and materials to be used by employees; and setting standards for employee safety and security. There may be some similarity between duties that qualify for both the executive exemption and the administrative exemption. One way to distinguish between the two exemptions is to focus on who is “in charge” of the business or a department at any given time. That person is likely to qualify for the executive exemption, so long as he or she is supervising at least two people and meets the minimum salary test. ED RENSHAW is a partner with the Carbondale law firm of Feirich/Mager/ Green/Ryan. F/M/G/R is a general practice law firm offering a full range of legal services, including labor and employment law, commercial transactions, banking, real estate, workers’ compensation, municipal law and estate planning. Call 618-529-3000 or visit www.fmgr.com.

everyone’s responsibility to carry the burden. For years now, Illinois has been known as the anti-business state. And, with the recent round of taxes, that may be hard for some to argue. The question that many business owners are now pondering is at what point does the costs of doing business in Illinois outweigh the benefits? CAVANAUGH L. GRAY is director of business development for The Entrepreneur Café, L.L.C. in Carbondale. For information on other state and city small business initiatives or for more information on how to start, grow and succeed in small business, be sure to follow The Entrepreneur Café, L.L.C. on Twitter, www.twitter.com/ TheECafe, or at www.ecafellc.com.

Retail sales for Southern Illinois cities City Anna Benton Carbondale Carterville Chester Du Quoin Harrisburg Herrin Jonesboro Marion Metropolis Mount Vernon Murphysboro Nashville Pinckneyville Red Bud Sparta Vienna West City West Frankfort REGION ILLINOIS

YTD Oct 2010

2009

2008

2007

2006

2005

101.4 55.7 500.0 35.4 44.5 69.9 161.6 130.2 10.1 569.3 67.9 427.8 109.0 79.8 31.4 61.9 107.4 33.0 72.8 92.3 $2,761.4 $122,262.0

114.5 69.4 565.5 39.9 52.9 100.8 191.9 147.2 12.5 676.0 77.1 476.7 129.1 107.9 37.2 70.1 126.4 37.1 91.9 111.4 $3,235.5 $139,593.2

113.3 71.4 587.7 40.1 51.5 91.9 179.3 135.9 12.4 673.4 75.9 482.8 117.1 101.8 39.0 77.7 130.5 40.5 89.6 111.2 $3,223.0 $237,438.0

112.3 72.4 607.4 40.3 51.7 94.4 173.6 134.4 11.3 662.4 79.8 461.5 94.9 105.2 35.8 73.7 129.5 39.8 82.8 111.4 $3,174.7 $180,162.7

111.7 75.0 610.4 39.9 54.0 103.1 168.5 137.5 11.5 592.7 74.8 501.0 93.0 105.7 41.7 82.5 133.1 36.9 77.7 106.8 $3,157.6 $173,362.8

109.7 70.4 579.4 32.7 51.1 95.0 164.9 127.9 11.5 545.9 69.4 475.3 94.6 101.1 38.0 82.5 127.7 32.7 70.8 102.3 $2,983.0 $167,459.0

% change 05-09

4.4% 1.4% 2.4% 22.0% 3.5% 6.1% 16.4% 15.1% 8.7% 23.8% 11.1% 0.3% 53.4% 6.7% 2.1% 15.0% 1.0% 13.5% 29.8% 8.9% 8.5% 16.6%

Alexander Franklin Gallatin Hamilton Hardin Jackson Jefferson Johnson Massac Perry Pope Pulaski Randolph Saline Union Washington White Williamson .,REGION ILLINOIS U.S.

3,188 18,098 2,772 4,151 1,849 33,873 20,580 5,181 7,485 9,460 1,980 2,949 15,559 13,208 8,374 8,309 7,736 35,610 200,362 6,686,338 153,698,000

363 2,109 265 384 190 2,470 1,872 540 633 1,040 197 305 1,311 1,267 942 598 665 3,202 18,353 613,724 14,282,000

699

692

State

Nov 10

Nov 09

Change

2009

U. S.

2008

Change

105 104

Nov 2010

Oct 2010

Nov 2009

11.4% 11.7% 9.6% 9.3% 10.3% 7.3% 9.1% 10.4% 8.5% 11.0% 9.9% 10.3% 8.4% 9.6% 11.2% 7.2% 8.6% 9.0% 9.2% 9.2% 9.3%

11.1% 12.1% 10.1% 9.5% 10.6% 7.4% 9.0% 10.5% 8.1% 11.2% 10.3% 10.4% 8.4% 9.9% 10.8% 7.4% 8.5% 9.0% 9.7% 9.2% 9.0%

12.3% 13.0% 10.7% 9.4% 11.8% 7.5% 10.3% 10.7% 8.6% 12.0% 11.3% 11.2% 9.3% 10.6% 11.1% 8.2% 8.6% 9.4% 10.3% 10.4% 9.4%

SOURCE: ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY, U.S. DEPARTMENT OF LABOR. FIGURES ARE NOT SEASONALLY ADJUSTED.

Change month

0.3 0.4 0.5 0.2 0.3 0.1 0.1 0.1 0.4 0.2 0.4 0.1 0.0 0.3 0.4 0.2 0.1 0.0 0.5 0.0 0.3

Consumer Price Index

100 98 94 90

IPMFG Nov 10 92.3

July 10 July 09 MONTHLY TOTALS

88 86 84

Change 1.8%

YTD TOTALS $4,366,099

$7,725,727

CFMMI Nov 10 81.1

0.9 72 1.3 70 1.1 68 0.1 66 1.5 64M J J A S O N D J F M A M J J A S O N ’10 ’09 0.2 SOURCE: FEDERAL RESERVE BANK OF CHICAGO 1.2 0.3 0.1 1.0 1.4 0.9 Nov 10 Nov 09 Change 0.9 1.0 MONTHLY TOTALS 0.1 728 343 112.2% 1.0 0.0 YTD TOTALS 0.4 3,378 1,062 218.1% 1.1 2009 2008 Change 1.2 0.1 ANNUAL TOTALS 2,750 2,636 4.3%

Williamson County Regional Airport passengers

The CPI measures average price changes of goods and services over time, with a reference base of 100 in 1982-84.To put into context, a current CPI of 194.5 means a market basket of goods and services that cost $100 in 1982-84 now costs $194.50. 220

218

$4,498,493

2009 ANNUAL TOTALS

76 74

$704,651

$703,363

Dec 10 94.9

102

Change year

108 107 106 105 104 103 102 101 100 99 98 97 96 95 94 93 92 91 90 89

103

Unemployment rates for Southern Illinois counties, state and nation Jobless

The CFMMI is a monthly estimate by major industry of manufacturing output in the Seventh Federal Reserve District states of Illinois, Indiana, Iowa, Michigan and Wisconsin. It is a composite index of 15 manufacturing industries, including auto and steel, that uses electrical power and hours worked data to measure monthly changes in regional activity. It is compared here to the national Industrial Production index for Manufacturing (IPMFG). Base year is 2007. Starting in November 2005, the index excluded the electricity component.

The Flash Index is an early indicator of the Illinois economy’s expected performance. It is a weighted average of growth rates in corporate earnings, consumer spending and personal income. An index above 100 indicates expected growth; an index below 100 indicates the economy is contracting.

U of I Flash Index

SOURCE: LATEST STATISTICS AVAILABLE FROM THE ILLINOIS DEPARTMENT OF REVENUE. FIGURES ARE IN MILLIONS.

Labor force

Chicago Fed Midwest Manufacturing Index

2008

$7,520,856

2.9%

Change

U.S. city average Nov 10 218.8

216

214

212

Midwest urban Nov 10 208.8

2.7% 210

208

Q3 10

Q3 09

Change

2008

2007

Change

Q3 10

Q3 09

Change 206

204 200 N D ’09

M ‘10

SOURCE: U.S. DEPARTMENT OF LABOR

Metro East Springfield Illinois U.S.

Jan 11

Dec 10

Jan 10

$3.08 $3.07 $3.23 $3.10

$3.08 $2.90 $3.07 $2.98

$2.72 $2.75 $2.85 $2.76