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A Different Kind Of Labor Day

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by Portfolio Armor
Monday, Sep 07, 2026 - 13:30

A Different Kind Of Labor Day

On September 6th, Nvidia CEO Jensen Huang declared, “AGI has arrived.” He was congratulating OpenAI on GPT-6 Astra, released three days earlier with advances in computer use and professional work. His assessment puts a labor-market question at the center of this Labor Day: how much human work can increasingly capable software replace?

At a given level of output, replacing tasks with cheaper automation reduces the labor needed to perform them. That changes the economics of recruiting workers, including skilled immigrants. The economy-wide result also depends on new demand, new businesses, and work that becomes more valuable alongside AI.

A Quick Programming Note

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The Hiring Margin

Adoption is already substantial. A St. Louis Fed analysis found that 39.2% of employed adults ages 18–64 used generative AI for work in the preceding week in the second quarter of 2026, up from 28.2% in the third quarter of 2024. Respondents reported saving 2.2% of their work hours.

Hiring is one place to look for substitution. In an August analysis of ADP payroll data, Stanford researchers found that employment among 22–25-year-olds in highly AI-exposed occupations was about 19% below the path implied by keeping pace with less-exposed peers through June. Reduced hiring accounted for most of the adjustment. The study describes an association whose causal explanation remains unsettled.

AI can also increase the productivity of existing workers. A customer-support field study found the largest gains among less-experienced and lower-skilled agents. Cognitive ability predicts aspects of job performance; automation exposure depends on the tasks a job contains. Advanced software can affect highly educated workers while leaving physical tasks dependent on people.

Three Different Economic Measures

A worker can be profitable to an employer, produce something customers value, and still contribute less in taxes than the public services their household receives. Those are different calculations. Everyone has value as a human being; some households have a negative net fiscal balance. Obligations to family members and fellow citizens also extend beyond their economic contributions.

There are estimates of the fiscal costs. A 2020 Center for Immigration Studies model put the lifetime net fiscal cost of refugees arriving at ages 25–64 at $133,000 each, expressed as a present value. It used a historical refugee cohort's age and education profile and added refugee-specific costs. That figure is a modeled lifetime balance, not an annual bill.

The underlying National Academies assessment found substantial first-generation costs, especially at the state and local level, where children's education is funded. It also found strong subsequent contributions from the second generation and generally positive long-run federal effects. Age, education, dependents, time horizon, and the allocation of public costs all affect the answer. Falling earnings would worsen a household's fiscal balance if other factors stayed constant.

Policy And Enforcement Are Moving

The H-1B debate already involves six-figure charges. The administration imposed a $100,000 payment on certain petitions in September 2025. DHS's August 25th proposed rule says a court vacated its implementing guidance in June and the government's appeal remained pending. DHS is now proposing a separate $103,265 fee for cap-subject petitions; comments close September 24th.

Enforcement has also accelerated. Our August 30th article discussed figures showing 49,571 ICE arrests in July, up 15% from June, as reported from government data. Arrest totals measure enforcement activity; completed removals and net migration require separate counts.

Fraud creates another measurable cost. In June, DOJ charged 15 Minnesota defendants over alleged healthcare and benefits schemes involving more than $90 million in intended loss. CMS already uses machine learning and network analysis to detect suspicious billing. Better detection could reduce losses; Astra-specific savings remain unmeasured.

Meritocracy And Membership

On August 27th, Paul Graham restated his hiring principle: “I believe the most qualified person should get the job.” Elon Musk endorsed it with “Yes.” In his response that day, Roman Helmet Guy described a country as an inheritance passed between generations and criticized treating its members’ prospects as a competition in technical ability.

His August 1st exchange with Musk used the family analogy directly: “Elon, do you give birthday gifts to your children?” He asked whether those gifts should instead go to the most exceptional candidates worldwide. The disagreement concerns the purpose of the institution: an employer selects workers for a job; a family’s obligations arise from belonging. Applying either model to a country is a political judgment.

Our August 22nd, 2025 essay examined the national-identity question through Vivek Ramaswamy and Nikki Haley. Civic nationalism locates national identity in shared political principles and institutions. Ancestry-centered accounts emphasize inherited ties and continuity. The family analogy grounds obligations in belonging; an economic admissions test evaluates prospective contributions.

Vivek Ramaswamy, Nikki Haley, And The National Question by Portfolio Armor

It's natural for them to champion India, but it's not in America's interest.

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Actual immigration systems combine purposes. The United States has family and employment immigration categories. Japan's employers reported a record 2.57 million foreign workers in October 2025, up 11.7% in a year. Cultural continuity and employers' demand for foreign labor can coexist. AI changes the labor calculation; the political response also depends on how each society understands membership.

Who Receives The Gains?

In our September 3rd post, we connected AI to migration, public equity ownership, and growth with falling prices. These are three possible consequences with different mechanisms.

Public ownership already has a precedent. Intel's August 2025 agreement announced an $8.9 billion federal investment equivalent to a 9.9% stake under its terms. Such investments can generate dividends or sale proceeds. Their fiscal return depends on purchase price, financing costs, performance, and how the proceeds are used.

Productivity can also support rising output and falling prices, a mechanism examined in historical BIS research. Competition determines how much of the cost saving reaches customers. Deflation simultaneously raises the real burden of existing nominal debt. The outcome for households will depend on wages, prices, and ownership income—the measures that will show how the AI transition is actually being distributed.

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