U.S. tax plan rattles investors, more jobless financiers seek to pivot, and climate commitments underpin green recovery: This Week in Finance

Welcome to This Week in Finance, your weekly roundup of the conversations trending among financial professionals on LinkedIn. Click Subscribe to be notified of each edition. This week:

Economists: Vaccines key to West's rebound

How quickly the economies of the U.S., Canada, and Europe rebound from the pandemic hinges on the pace of vaccinations, economists tell The Wall Street Journal. Moody's Analytics estimates households around the world amassed $5.4 trillion in pandemic-related savings by the end of March, and economic data coming out this week is expected to show U.S. growth accelerated as vaccinations expanded and restrictions eased in the first quarter. The U.S. and UK are expected to recover quickly; the rest of Europe and Canada, hobbled by vaccine supply issues and safety concerns, will likely take longer. ?? Here's what people are saying.

• From savings boom to spending spree?: Consumers globally have racked up $5.4 trillion in savings on top of what would be expected without the pandemic, estimates Moody's. The credit-rating agency predicts a surge in consumer spending once economies reopen thanks to "pent-up demand" and "overflowing excess saving" amounting to 6% of global GDP.
• Jobless claims at new pandemic low: The filings, a proxy for layoffs in the U.S., show a strengthening labor market as jobs that disappeared during shutdowns start to come back. Still, the level remains roughly double the pre-pandemic average in 2019.

Biden tax plan rattles investors

Millionaires and billionaires are responding to President Joe Biden's plans to restore the top marginal income tax rate to 39% with "anger, denial, and grief," and they're scrambling to adapt and limit their exposure, per Bloomberg. Multiple reports indicate Biden will propose raising the top marginal income tax rate to where it was before the Trump administration's 2017 cut and nearly doubling the capital gains tax for those earning above $1 million a year. The American Family Plan, set to be unveiled this week, would direct $1.5 trillion in spending and tax credits at lower-income Americans. ?? Here's what people are saying.

Unemployed financiers look elsewhere

Those in financial services who have found themselves unemployed have become significantly more willing to leave the industry over the past six months, according to LinkedIn's Workforce Confidence Index. About three-quarters (74%) of this cohort in the U.S. say they would consider taking their skills elsewhere, up from 56% in the fall. Taking on freelance work, while still a consideration for about half (51%), has become less attractive, as has the alternative of earning less money. Relocating — the least palatable option — has ticked up in consideration. ?? Here's what people are saying.

Economic rebound 'anything but sustainable': IEA

The International Energy Agency warned that cash flow into fossil fuels in the post-pandemic recovery will see carbon dioxide emissions jump in 2021 to its second-biggest annual rise in history. The economic rebound is currently "anything but sustainable for our climate," the IEA's executive director said, in part because coal-fired power is making a big comeback in Asia. It puts the world on track to reverse 80% of the decline in emissions seen in 2020. ?? Here's what people are saying.

• U.S. commits to deep emissions cuts: Biden's announcement followed the release of an open letter signed by more than 400 investors and companies that urged the White House to curb climate-changing emissions by at least 50% by 2030.
• More banks to quit coal financing: Southeast Asia's largest lender said it will now turn away customers that earn more than a quarter of their revenue from coal, and will raise this standard over subsequent years.

• Could green policies create jobs?: A green stimulus plan could create more than 1.2 million jobs in the UK in two years, according to new research. Permanent job losses from the pandemic may hit up to 2 million there in the next decade, and employment in the green sector could help those constituencies expected to be hit hardest.
• Where green jobs are: A new analysis by LinkedIn's Economic Graph team shows that traditional green jobs, such as energy analyst and geologist, are still in demand — but many other roles, such as customer service representative and compliance manager, are also now requiring green skills.

Retirees gain financial confidence

U.S. retirees' confidence about their financial futures is increasing, and their optimism about Social Security and Medicare is at an all-time high, according to the Employee Benefit Research Institute's 2021 Retirement Confidence Survey. It shows 80% of retirees and 72% of workers are somewhat or very confident in their ability to live comfortably in retirement — both near record highs. A record 72% of retirees and 53% of workers are somewhat or very confident that Social Security benefits will keep being paid out. EBRI credits vaccines, along with improving job and stock markets, for the rising optimism. ?? Here's what people are saying.

Supply chain mess hits small firms

Global supply chain disruptions have already hit tech, various carmakers, and food manufacturers, and now small businesses are increasingly feeling the ripple effects. The Wall Street Journal reports smaller manufacturers, wholesalers, and restaurants are dealing with shortages and price spikes for supplies, while the Suez Canal obstruction and backlogs at major ports further slow down the pipeline. According to a survey of 800 companies, 44% of small businesses reported shortages or other supply chain problems last month, and a U.S. Census Bureau survey found small businesses in wholesale trade, manufacturing, and construction among the hardest hit. ?? Here's what people are saying.

CEO pay 'stratospheric' despite pandemic

CEOs of companies that were devastated by the pandemic — and laid off tens of thousands of workers during the crisis — were still rewarded with "stratospheric" paydays, reports The New York Times. Proxy filings show the chief executives of Hilton, Norwegian Cruise Line, and Boeing made about $56 million, $36 million, and $21 million last year, respectively, even though the pandemic paralyzed the travel and hospitality industries, inflicting financial pain on all three companies.

• The gap between executive compensation and average worker pay keeps widening. According to the Economic Policy Institute, CEOs now make 320 times what a typical worker makes. In 1989, the ratio was roughly 61:1.
• Pay rose 14% for typical workers from 1978 to 2019, while compensation has spiked 1,167% for CEOs.
• Here's what people are saying.

The art of imitating Warren Buffett

The business and investing worlds often fixate on newness. If you can identify what's next, the thinking goes, you can reap incredible rewards. But author William Green says that may not be necessary. He writes about investor Mohnish Pabrai, who has made a fortune by excelling at imitation. His source of inspiration: Berkshire Hathaway's Warren Buffett and Charlie Munger. Over the past few decades, Pabrai has become a master of Buffett mimicry, adopting the legendary investor's appreciation for simplicity and willingness to say no. ?? Here's what people are saying.

With Jake Perez, Pieter Cranenbroek, Cate Chapman, Yunita Ong, Emma Hudson, Ashley Peterson, and Scott Olster.

What's your take on the week's news and other developments impacting you or your business? Join the conversation in the comments below.