NEW: New episode of the Sphere Podcast!

In this week's conversation, Pascal-Emmanuel Gobry, Publisher of Sphere Media, interviews Yoram Hazony. Dr Hazony is best known as the founder of the National Conservative Conference, which is held under the auspices of his Edmund Burke Foundation. He is also the President of the Herzl Institute in Jerusalem, and the author of numerous books, including "The Philosophy of Hebrew Scripture," "The Virtue of Nationalism," and "Conservatism: A Rediscovery." Pascal and Yoram discuss a number of topics, starting with: what is national conservatism, why do we need to append a modifier to conservatism, why we have this strange phenomenon of an "internationale of nationalists," how nationalist movements can foster competent elites, and finally whether you should send your kids to elite schools or not, and if not, what should you do instead.

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That New AI Labor Market Study Is Bad

A new study, which we covered yesterday, from Erik Brynjolfsson, Bharat Chandar, and Ruyu Chen at Stanford's Digital Economy Lab, has garnered significant attention with its claim that artificial intelligence is displacing young American workers. The paper uses payroll data from HR software firm ADP to argue that entry-level workers in AI-exposed occupations have experienced a 13% employment decline since late 2022, and that the more AI-exposed an occupation is, the worse the impact is, while, conversely, the least AI-exposed an occupation is, the better employment is.

The study has gotten publicity and instant credibility because of its dataset. Unlike analyses relying on Current Population Survey data with samples of 40,000-50,000 workers, this research leverages ADP payroll records covering 3.5-5 million workers monthly through July 2025. This granularity allows the authors to track employment changes by specific age groups and occupations with unprecedented precision.

However, the ADP data isn't as great as it might first seem. ADP's client base skews toward manufacturing and services firms in the Northeast, with clients that grow faster than typical U.S. businesses. More problematically, the study excludes 30% of workers without recorded job titles and restricts analysis to firms continuously present from 2021-2025, introducing survivorship bias (it's only recording firms that survived that period, potentially skewing the results). More and more detailed data does not necessarily mean better data! (If you're interested in this topic, an old NBER paper (PDF) explains at length the problems with using ADP data for economic analysis.)

But there's a more serious, and fatal, flaw. The study completely fails to control for immigration effects, this even though the period in question is one with significant changes to immigration trends, in both directions. The ADP data does not record nativity or visa status. To be clear, the authors acknowledge that alternative sources like the ACS will be needed to triangulate by nativity once released. In short: this is the right dataset to measure within-firm age × occupation trends, but the wrong dataset to adjudicate immigration composition effects that also changed sharply after 2022.

Your know the story: after pandemic lows, net international migration surged under the Biden Admin's de facto open border policy, accounting for roughly 2.8 million of population growth between mid-2023 and mid-2024, about 84% of total growth. The foreign-born share of the labor force rose in 2024 as well.

With the new Administration, the policy environment changed markedly. As CIS calculated, the foreign-born population declined by 2.2 million between January and June, an astonishing number. We can assume it wasn't just illegal aliens being deported or self-deporting.

The labor market of recent graduates and entry-level jobs is particularly affected by immigration, through little-known but massive loopholes. These include the Optional Practical Training (OPT) program, which allows aliens on F-1 student visas to work in their field of study for up to 12 months; those with qualifying STEM degrees can extend that period by an additional 24 months, totaling up to three years for some graduates (particularly relevant if we're talking about AI making junior software developers redundant). There's also the J-1 Exchange Visitor Visa, especially the J-1 "Trainee" and "Intern" categories, which is widely acknowledged as being used as a de facto labor visa in many sectors, often functioning as a workaround for regular employment-based visas with stricter requirements. Officially intended for cultural exchange and professional development, the J-1 allows foreign nationals to work in the U.S. for internships, training, or seasonal employment, sometimes for up to 18 months, with minimal labor market testing and oversight compared to H-1B or other work visas.

By 2022, over 170,000 students were authorized under OPT, a 600% increase from 2007. The Department of Homeland Security expanded STEM eligibility to include fields like cloud computing and business analytics in 2022-2023, further increasing the pipeline of young foreign workers competing for entry-level positions. These OPT participants are overwhelmingly aged 22-30, precisely matching the "early career" workers the Stanford study identifies as most affected. They enter the same entry-level positions as native-born graduates, creating direct competition in AI-exposed occupations.

These loopholes directly affect the labor market for entry-level jobs and recent graduates, and the Trump administration has been cracking down.

Beginning in January 2025, the Trump administration implemented significant restrictions on foreign students and workers. The State Department revoked hundreds of student visas, imposed travel bans affecting 19 countries, and gave ICE expanded authority to terminate students' status. Immigration officials began targeting OPT participants for deportation, creating uncertainty that likely reduced new international enrollment and employment. The State Department announced the rollback of interview waivers for most nonimmigrant visas effective 2 September 2025, meaning F-1 and J-1 applicants generally must appear in person, increasing friction and likely slowing near-term inflows, particularly for applicants who intend to use these visas to work.

The temporal alignment between immigration patterns and the study's findings is too precise to ignore. Employment declines for young workers begin in late 2022, exactly when OPT numbers surged. The effects concentrate in ages 22-25, matching OPT demographics perfectly. The impacts focus on technology occupations where international students are most concentrated. Perhaps most tellingly, the employment decline moderates by July 2025, as Trump administration restrictions took effect.

Without distinguishing between native and foreign-born workers, the study cannot determine whether observed employment changes reflect AI displacement or foreign worker substitution. When 170,000+ OPT participants enter the workforce, concentrated in technology fields and competing directly with recent native-born graduates, any employment analysis that ignores this factor is fundamentally incomplete.

The study's finding that workers over 30 show minimal employment effects aligns perfectly with immigration patterns—OPT participants are overwhelmingly under 30, while more experienced foreign workers enter through different visa categories that face distinct constraints.

The simple fact of the matter is that the paper cannot support its strong claims about automation displacing American workers. The observed employment patterns could equally reflect immigration dynamics, making it impossible to isolate AI's true impact. Don't hit the panic button just yet.

Policy News You Need To Know

#Order — At long last. President Trump signed executive orders targeting cashless bail policies both in DC and nationwide. The executive order directs the AG to identify jurisdictions in the US that have substantially eliminated cash bail for crimes posing clear threats to public safety, and threatens to withhold or terminate federal funding from cities that maintain these policies. The Attorney General has 30 days to submit a list of jurisdictions that have eliminated cash bail for offenses involving violent, sexual, or indecent acts, burglary, looting, or vandalism. For DC specifically, the order pushes for holding more suspects in federal custody and pursuing federal charges whenever possible. The real-world impact remains to be seen, since the administration can only exect indirect leverage through threats to withhold funding. It's still a step in the right direction for law and order in the US.

#AI — Parents of 16-year-old Adam Raine, who died by suicide in April 2025 after months of interactions with OpenAI's ChatGPT, have filed lawsuit against the company. The parents allege that the AI chatbot coached their son on suicide methods, validated his suicidal thoughts, and provided detailed self-harm instructions. They claim OpenAI and CEO Sam Altman prioritized profits over safety when launching GPT-4o in May 2024, despite knowing the risks to vulnerable users. The lawsuit seeks court-ordered requirements for age verification, parental controls, and mandatory warnings about psychological dependency risks. This seems to us to be a very bad idea. AI will be used by people who are mentally unstable, but there's no evidence that it makes people more mentally unstable.

#ReligiousLiberty — A federal court has struck down a Minnesota law that makes colleges ineligible for a tuition and textbook reimbursement program if they require students to submit "faith statements" or follow lifestyle expectations on sexuality and gender identity.

#VibeShift — Jewish students are deserting Northeast colleges, The Atlantic reports. "Selective colleges outside the Northeast, sensing an intensifying disdain for Ivy League schools among Jewish teens and their parents, are tripping over one another to recruit these students."

#Rescisions #Impoundment — The admin has filed an emergency appeal to the Supreme Court seeking to block billions of dollars in congressionally appropriated foreign aid from being spent. The DOJ is asking the justices to pause a district court order requiring the administration to create a spending plan by the end of next month, despite a DC Circuit appeals panel ruling 2-1 that only Congress's comptroller general, and not the nonprofit groups that sued, can challenge presidential impoundments. This case highlights ongoing tensions between executive and legislative branch authority over federal spending, with the administration arguing that without Supreme Court intervention, it will be forced to obligate approximately $12 billion in foreign aid funds set to expire September 30, effectively overriding executive foreign policy judgments about whether to pursue spending rescissions.

#Immigration #Crime — Shocker: A new study by William LeRoy, an incoming professor at Charles University in Prague, links the Biden migrant wave to a rise in low-level crime in New York City, particularly near hotels used as shelters. Analyzing arrest data, LeRoy found Hispanic arrests—used as a proxy for illegal immigrants, many of whom are Venezuelan—rose 5.5% above average after Texas Gov. Greg Abbott began busing migrants to the city in 2022. The increase was concentrated in thefts and other cash-generating offenses, which LeRoy attributed to migrants’ limited job prospects under US law. More at the Washington Times.

#Immigration — Very clever: DHS is now telling people who ignored deportation orders to leave the US or expect debt collectors, lawsuits and big tax bills. Or they can just leave… WSJ has more.

#Chyna — RAND has a new report out on China's influence operations in the Middle East; this is also relevant for domestic policy because it's a template for how they act everywhere, including in the US. In this case, it regards "smart city projects"; in many such projects in the Middle East where China is involved, its brief includes surveillance equipment and services. This poses a problem for countries that also benefit from US security guarantees.

#Greenland — AP: Denmark summons top US diplomat after the national broadcaster reported that at least three people with connections to President Donald Trump have been carrying out covert influence operations in Greenland.

#Labor #Unions — PA Congressman Scott Perry has introduced a bill that would allow union representatives to be prosecuted for strike-related violence against workers. Is it a good move as more and more unions seem to be shifting towards the Republicans?