Companies are narrowing the blue- and white-collar experience as they're forced to adapt to a worker-led market, Axios' Hope King writes.

• Basic office tools and concepts like corporate communications and schedule flexibility are migrating to frontline operations through investments in technology.

Why it matters: Employee retention is a high priority for companies with lower-paid frontline workers who have plenty of options right now.

• High turnover and supply chain breaks limit the growth or recovery of goods and services sectors. 

State of play: Nearly 4 million people quit their jobs in July, close to the all-time high set in April.

• Quit rates were highest in nondurable manufacturing (food, clothing, cosmetics, etc.) at 3%, retail (4.4%), and accommodation and food services (5.4%). 

What’s changing: To deepen retention rates, companies are trying to create a sense of care for frontline workers by sending more messages about diversity and inclusion, allowing workers to split long shifts, or encouraging work from different locations to make time for family and child care, WorkJam CEO Steven Kramer tells Axios.

• WorkJam makes software for workers in high quit-rate sectors as well as the companies that employ them. It has added about 1.5 million essential workers in North America, Europe and Asia to its platforms since the start of 2020, a 75% increase, Kramer says.

The details: WorkJam and similar companies provide digital training, messaging and schedules for employees to look for, sign up, split or swap their hours.

• Compare that to bulletin board posts in a break room or multiple calls to managers, Kramer says. "That digital relationship between employee and manager and the company has never existed before."

Trends to watch: Setting overtime as optional and creating an environment where employees aren’t frowned upon for having to move their schedules, Becky Frankiewicz, president at ManpowerGroup North America, tells Axios.

The bottom line: While the pandemic is accelerating many of these improvements and other social metrics, it’s also prompted companies to plan for automation, a worrying outcome for the same group of vulnerable workers.

China’s central bank boosted liquidity as Evergrande issued a vague statement about a coupon payment on its bonds, saying that it had been resolved with bondholders in private negotiations. (Bloomberg)

SEC chair Gary Gensler questioned the long-term viability of cryptocurrencies and renewed the call for more regulatory oversight to protect investors. (WSJ)

The Justice Department sued American Airlines and JetBlue in an attempt to block a deal that called for the airlines to consolidate their operations in Boston and New York City. (Axios)

Inequality widened in September, driven by income losses and fears among the most financially vulnerable, according to the latest Morning Consult/Axios Inequality Index released today.

Why it matters: As COVID continues to spread, expanded pandemic-era unemployment benefits expired this month, removing a financial safety net for 7.5 million Americans. Worsening inequality underscores the role the enhancements played for those at the low end of the income spectrum, Morning Consult chief economist John Leer tells Axios.

• “What’s particularly different right now — if you connect the economic reality with the policy situation — is that those folks who experienced pay and income losses don’t have unemployment insurance benefits to help support them and support their finances," Leer says.

How the index works: It compares sentiment between income groups based on consumer confidence, employment outcomes, employment expectations and financial vulnerability. The larger the gaps, the higher the inequality level.

• The overall index widened to 7.23% from 6.52% in August.

What they found: The Delta variant's impact on employment is worsening, especially in customer-facing service sectors where consumer confidence also factors in.

• For example, the share of food and beverage workers reporting income losses shot up to 26.5%, from 19.1% in the span of four weeks. These are typically lower-paying jobs so the gap in income losses between someone making less than $50,000 and a person making more than $100,000 increased to 4.5%.
• Paying bills is getting harder for some. The number of people who say they can't afford a month of basic expenses rose to 31.1% from 29% for those earning less than $50,000 — and fell to 5.3% from 9.8% for those earning above $100,000.

The outlook for global automakers and suppliers continues to worsen, amid heightened risk from supply chain disruptions, including the ongoing semiconductor chip shortage, Axios' Joann Muller writes.

Driving the news: IHS Markit slashed its forecast for global light vehicle production in 2021 by 6.2% — about 5 million vehicles. It's cutting even deeper — 9.3% or about 8.45 million vehicles — for 2022.

It's unusual for IHS Markit to whack its forecast by so much, but the compounding effects of the chip shortage, including COVID-19 restrictions in Southeast Asia where packaging and testing occurs, warrants the pessimistic outlook, the company said in a release.

• About 4 million units of production have already been lost through the first half of 2021, and another 3.1 million or more units could be lost in the third quarter, per IHS Markit.
• The chances of making that up by the end of the year are becoming less likely.

Of note: Toyota cut its September production plans by 40% and said it would reduce its targets for October, too.

• "This is symptomatic of the ongoing volatility in the sector and the continued lack of visibility beyond the very short term," said Mark Fulthorpe, executive director for global light vehicle forecasting at IHS Markit.

What to watch: There could be a silver lining, however.

• RBC Capital Markets auto analyst Joseph Spak said the lower outlook could be "a clearing event" for the industry.
• While the industry needs time to build back inventory, manufacturers might not go back to prior levels of production because they've seen that there's higher profit in keeping vehicle supplies tight, he noted.
• Ford and GM have talked about trying to better match supply and demand through the use of "order banks" instead of shipping lots of cars to dealers and letting them figure out how to sell them.

Yes, but: Automakers have a history of falling back on bad habits.

A lot of government agencies can propel their public-sector employees into high-paying private-sector gigs. Sitting squarely at the top of the list is the Treasury Department, Axios' Felix Salmon writes.

Why it matters: Treasury has almost unlimited financial power.

• Treasury secretaries seen as being friendly to Wall Street — think Robert Rubin, Larry Summers or Tim Geithner — invariably exit to multimillion-dollar salaries in the financial sector. Steven Mnuchin has managed to do even better for himself.

Driving the news: Mnuchin has raised $2.5 billion so far for a private equity fund, including from Saudi Arabia, a country toward whom he was notably friendly while in office. If the fund is structured with a standard 2% management fee, that’s $50 million per year right there for Mnuchin and his colleagues, before they make a single penny from investment returns.

• What we're reading: The New York Times has an in-depth story about how accountants cycle into Treasury, do a tour of duty there that often involves enforcing the law in business-friendly ways, and then cycle straight back out to their own firms "with loftier titles and higher pay."

The bottom line: As Summers himself says, "the real scandal is not the illegal things people do, rather it’s what is legal."