NORMAL — Collaboration between business and education is critical if the country is to address its ongoing struggle with unemployment, Ed Rust Jr., chairman and CEO of State Farm Insurance Cos., said Friday at the McLean County Chamber of Commerce’s Twin Cities Showcase.

And while he discussed State Farm’s planned expansions in Atlanta, Ga., Phoenix and Dallas, Rust declined to elaborate on whether the company’s decision to lease or build large office buildings in those areas could affect employment at State Farm’s Bloomington headquarters, the county’s largest employer.

He stressed that the developments aim to keep State Farm competitive, and that the company will remain in Bloomington, where it employs about 15,000 people.

“Bloomington has been the home of State Farm for 91 years,” said Rust during his speech at the Marriott Hotel and Conference Center in Normal. “It will continue to be.”

Rust, also current chairman of the U.S. Chamber of Commerce, said businesses need to work with educators in training the next generation of employees. Part of the reason the national unemployment is still at 7.6 percent despite job openings is a lack of potential employees with the right schooling and skills, he said.

“Education, and how we adapt and change, … from a business standpoint is critical,” Rust said.

Peter Rankaitis, executive director of the nonprofit Project Oz in Bloomington, said Rust had good insights in his speech, including his responses to questions about such topics as charter schools. Rust said the goal should be all schools, public or charter, performing at top levels.

“Some of his comments about education, I think, are correct,” Rankaitis said.

There are also reasons to be optimistic about the economy moving forward, he said. The housing market is showing signs of growth due to low interest rates and energy prices remain relatively stable. But the economic climate is not yet good enough to increase hiring, he said.

“While employment is up, you have to look at (those who are) underemployed or those who have withdrawn from the job market, and those remain very troublesome,” Rust said.

Rust said government should encourage global trade and re-examine rules that slow down small businesses.

“Regulations are needed to give you rules of the road … but regulations that have outlived their usefulness should be eliminated, contemporized,” Rust said.

In remarks following his keynote address, Rust declined to comment on whether State Farm will appeal a federal jury’s April ruling charging the company with defrauding the National Flood Insurance Program in the case of a home damaged during Hurricane Katrina in 2005. In the Mississippi case, former State Farm employees testified they were instructed to modify damage reports to avoid payouts.

The court ordered State Farm to reimburse the NFIP $250,000 in that case, which could set a precedent for similar suits.

(12) comments

Smartone
Smartone

Yes, adaptation is key and businesses need to work with junior high schools to get more students in vocational education after high school. If you look at where the job openings are at, many don't require a 4-year college degree, but a technical degree with specific training. Junior high students need to ask themselves if they want to live with their parents when they are 25, 30, or even more years old. If the answer if no, then they need to find an occupation that interests them that is and will be in high demand. Right now those areas are engineering, accounting, nursing, doctors, and many more health care related jobs. Students need to look at what degrees are not being utilized after college and steer clear of those areas if they want to support themselves and be able to repay their student loans. Instead of some of the useless things they teach in junior high, I won't say which ones, it would be very useful to have students explore the career builder dot com website and do some job exploration. It is not always what you think you want to do after high school that is the smart economical choice. Students have to get trained maybe in their 2nd or 3rd choice field of study which allows them to get a job after college graduation. Not everyone needs to get a 4-year degree and it is time to quit lying to our children. There is nothing wrong with getting technical training and there are vocational schools with a very high employment rate of 90% when the student completes the program. The wages are not $100K per year, but they do start out at $45K per year. Businesses want these people now and cannot find the skills that are necessary to keep up with their business orders let alone expand. It is nice to dream, but reality is, students will have student loan debt, and they don't want to live with mom and/or dad forever. It is time for parents to set the expectation that their child will be self sufficient and it is not ok to come back home and live with them after graduating college. If you don't set high enough financial expectations for them, then they will continue to want someone to provide a roof and food for them. Today's children, not all but some, live to high of a living standard and expect that is what they should have too which is wrong. Parents need to highly encourage the fields where jobs are plentiful and stand firm that they cannot depend on them after college graduation. Students choose their path in college and they have to learn to live within their means which might mean going back to barely above minimum wage on they graduate in this new job market. Like any business in IL, State Farm would be a fool not to expand and look elsewhere to place employees. The property taxes alone are enough to eventually make me move, let alone the lousy weather. IL is in very poor health financially and it gets worse month after month. Go outside of the bubble of Bloomington/Normal and you can see the hardship in families and wondering how they will pay the next light bill. We better all hope that State Farm keeps employment stable in the area or all home values will suffer and thousands will be upside down in their mortgage that never have been through the 2008 recession.

SDog
SDog

You are correct. Great points.

thoughts a million
thoughts a million

Good points Smartone, but next time, could you use paragraphs? It would make reading it easier on these old eyes.

WalterK
WalterK

How do you do that?

WalterK
WalterK

"If you don't set high enough financial expectations for them, then they will continue to want someone to provide a roof and food for them. " Excellent comment. I wish this was our NATIONAL goal. We are in a time of adjustment in this country. We lost millions of jobs because of NAFTA and unrealistic wage expectations pushed by unions allowing our manufacturing sector to be decimated in this country.


Only way to get back is reset those expectations, set new management expectations on large companies (especially executive bonuses), and bring back the manufacturing jobs. I agree totally not everyone can or is even capable of getting a 4 year degree. Not every person in America has the same academic aptitude or intelligence. Colleges and the continual federal loan program are making it impossible as colleges just keep raising tuition in accordance with what the loan program provides. So, if we want folks to get back "on the line" and start making stuff again in America, we have to provide a set of manufacturing jobs along with the training and employees to go with it.


Not everyone can be a pro athlete, rock star, or movie star, regardless of what the media tries to push down on our young people.

Trixie
Trixie

Points well taken Smartone. I totally agree. You hit the nail on the head!

otis1949
otis1949

Ed you dad would be proud

Interested
Interested

Nice post Smartone.

thisandthat
thisandthat

State farm has to appeal the case or it could cost them Billions not just in Mississippi but in New Orleans and other states where they modified reports. I have family who lost thousands in MS. because of Katrina and State Farms clams.

WalterK
WalterK

Again, the case involves payments to the Federal Flood Insurance Program and NOT to individual clients. If they "lost thousands" it was probably because they were under-insured or didn't have flood insurance in the first place. In the case cited, the policy owner was paid their full claim by a combination of State Farm and FIP, so they didn't loose any money.

Crybaby
Crybaby

Ed Mentions: 'While employment is up, you have to look at (those who are) underemployed or those who have withdrawn from the job market, and those remain very troublesome,” Rust said.' C'mon, Ed, no one wants to hear that UN-happy stuff. However, your comment that 'Education, and how we adapt and change, … from a business standpoint is critical' certainly presents some fascinating possibilities. How 'bout this? In the ever changin' and hard drivin' business environment of the 21st. Century, where we must have 'higher education standards' and the ability to adapt to change every fifteen or twenty minutes , why should taxpayers be expected to continue to bear the burden of training ( or ill-training, if many Corporate Execs. like Ed are to be believed) prospective candidates for the Corporate world. In the spirit of the Technical Schools, for careers at State Farm, General Motors, IBM, etc. ? Why not take the bull by the horns and get 'creative'. And establish 'State Farm University', the 'University of General Motors', or the 'College of IBM'. No worries, kids outta' high school can still borrow piles of dough but re-direct tuition payments to any of the newly created Corporate Universities. Where they can be trained, if deemed necessary, all the way through an MBA or a PhD. And trained, for Corporate profit, precisely in the areas the Corporation deems necessary. Or, perhaps no longer would the traditional four year stint be necessary. Kids could be taught only what they need to know to carry out their assigned duties. Which, depending on whom you ask, would take considerably less time. It'd be much more efficient. Why wait to re-train them AFTER a traditional University stint? Besides, what with present University faculty and their loved ones who presently work at traditional Universities no doubt willing to line up to move their offices to even plusher surroundings and greener pastures, it'd be a win-win for nearly all involved. Best of all, although I realize you'd rather not comment, the smart money is nevertheless bettin' that there will soon be ample local floor space opening up for precisely the grand and 'creative' venue I have in mind.

KenKasprzak
KenKasprzak

I must say that State Farm's cooperatives with the Universities of New Dehli and Bombay are paying huge dividends...

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