As the world of work changes, so must the way we plan our lives

Job insecurity means saving in the good times to tide over the uncertain ones

The age of insecurity is still firmly entrenched. The US economy is growing strongly, though only recently has it been generating really strong growth in jobs. The British economy is growing strongly, though there are quite reasonable doubts about the sustainability of that growth. But growth does not bring job security. Nor does size. We have had the start of a string of job cuts by the oil majors, which for obvious reasons have to cut costs. This has followed swathes of cuts by the big banks. And now it seems there will be big lay-offs at IBM in the next few days, though the company has denied the stories that these will be more than 100,000, a quarter of its workforce.

Such lay-offs are not confined to the private sector. Some government departments in the UK are losing a quarter of their staff, and some local authorities more.

Yet employment – and not just self-employment – keeps going up. The response of governments here and elsewhere in the developed world is to focus on training, fitting people to jobs, getting more young people on to apprentice schemes and so on. Of course that is right: the idea that people should build transferable skills as being the best way to prepare them not only for the jobs now but for jobs that don’t yet exist.

Nothing should take away from this. My own view is that we have a lot to learn from Germany’s apprentice system – there was a meeting at the German embassy in London about the ways in which German companies with operations in the UK were bringing their experience to this – and the good news is that a lot is happening on this front. But there is another element to coping with this age of insecurity, which is not just teaching transferable skills but teaching lifestyle skills.

The point here is that some people relish the flexibility of the new economy. We are setting up more new businesses than ever before in our history. Nearly all net job creation comes from small companies. We are also, at last, developing ways of generating risk capital and using that to back new enterprises. But serial entrepreneurship, however welcome, is for a tiny portion of the workforce. The challenge is to help the rest to cope with uncertainty: the mass of people who would really prefer to have secure jobs but in practice are going to face huge uncertainty in their careers.

One element of this issue is being recognised: what needs to change to cope with the growing number of self-employed people. They now represent as much as 15 per cent of the workforce, and it is quite plausible that there will be more self-employed than people working for the government in the life of the next parliament. More pertinent, perhaps, is the likelihood that three-quarters of working people will at some stage in their careers be self-employed.

Quite what we are doing about this is another matter. As the proportion grows, profound changes in labour and pension legislation, and in tax regulations, will be required. As anyone who is self-employed or runs a small business will know, the tax system is designed for large companies, not individuals.

But the age of insecurity has implications far beyond self-employment and transferable skills. It is really a question of teaching people how to think of their working life as something that will be varied and rewarding but also insecure, and then encouraging them to plan with this in mind. We are doing one thing already: teaching personal finance in schools, for this is now part of the national curriculum. That is a start. But nudging people towards being robust in the face of insecurity involves a lot more than managing personal finances. It certainly does mean saving in good times to tide over uncertain ones, but that is really only the start.

There is, I suggest, something else. People so often define themselves in terms of their employer – “I work for IBM”, “I am a civil servant” – rather than being themselves. The outside world thinks that way too. As anyone who has left a large company and gone to a small one will know, people are much less likely to take your calls if they don’t recognise the name of the firm you represent. So the more that we can develop a society that values people for what they do and who they are, rather than who they work for, the happier we are likely to be.

None of this is to downplay the importance of large companies, and the training they offer, in developing a career. That is not going to change, even if the companies do. What it is saying is that job insecurity is likely to increase, not decrease, so therefore we have to think of other forms of security. Government has a role here, and it is and will remain the ultimate guarantor. But the onus will shift more and more on us as individuals to cope with a world in which no job is secure, and prosper within it.

Drilling down to what is a sensible price for oil

Is oil going to be $30 or $200 a barrel? Rather a big range, you might think, but today we had those two utterly different suggestions. Gary Cohn, president of Goldman Sachs, said that he thought oil prices would continue to decline and could go below $30 a barrel. “We’re probably in the lower, longer view,” Mr Cohn, who was once an oil trader, said in a CNBC interview.

And the prediction of $200 a barrel? That came from the Opec secretary-general Abdulla al-Badri. “Now the prices are around $45 to $55, and I think maybe they reached the bottom and will see some rebound very soon,” he told Reuters. He added that crude could climb to $200 a barrel or higher “if you don’t invest in oil and gas”.

Just to stir the pot further, let me remind you that earlier this month Prince al-Waleed bin Talal, the Saudi billionaire, predicted that oil would never rise above $100 a barrel again.

Well, never is a long time, To clarify, the below $30 view is a short-term one, while the above $200 view is conditional on investment drying up, something not likely to happen.

Nevertheless, the range of views is fascinating, coming as it does on top of the unpredicted collapse of the oil price last year, and for a commodity so central to the world economy. What can sensibly be said?

Three things. One is that oil and gas will continue to supply more than half the world’s energy for another generation. The second is that when the price is above $100 a barrel, in present day dollars, there is tremendous pressure both to conserve the stuff and to find more of it. The third is that below $40 there is much less pressure to conserve and it is hard to finance new exploration. So there is a band – and you can argue whether the centre point is $60 or $80 – which is broadly sensible. We were above it last summer; we may go below it in a few weeks. So ultra-cheap oil won’t last; but nor will vastly expensive oil either.