Delia ran the evisceration line at the poultry plant I own near Gainesville for 31 years. Her hands stopped closing properly in year twenty-seven — the cold room runs at 34 degrees, and I saved $22 per warming station and $0.003 a bird — but the hands were never the point. The point was the payroll. Delia cost $19.75 an hour, plus the FICA match, plus comp, plus the warmth the protocol binder promised and I withheld. Every 2 weeks, 7.65% of her check flowed into a trust fund that James Freeman, in the Journal, warns this morning is running dry. The Medicare hospital fund depletes by 2033, he writes. Too few workers per retiree. Too little growth. The math stops working. His answer is artificial intelligence — productivity so vast it closes the gap, more output from fewer workers, the revenue to keep the checks coming.
He’s right that the arithmetic is the problem. A fund that collects 7.65% from every payroll in America was built on a single bet: that the supply of paying bodies would grow.
I’m removing the bodies.
The arm I installed in March costs $1.27 an hour, amortized. It does not get cold. It does not pay FICA. I have 900 positions on the evisceration floor between Gainesville and the Arkansas line, and I’ve signed the purchase orders on all of them. At $18.48 saved per position per hour — that figure already accounts for the comp, the FICA match, and the health premium I no longer carry — the annualized savings clear $34 million across the division. The installation runs through fiscal year-end. The quarterly number is the best I have ever booked.
Watch what the $1.27 buys me, because this is the part Freeman won’t say aloud.
The trust fund loses the FICA from every one of those 900 arms — roughly $2.7 million a year that was funding your mother’s check. Multiply me by every poultry processor in the South. Multiply that by the logistics centers, the call centers, the claims floors. The white-collar positions fall faster because the software scales to zero marginal cost. I removed the bodies. The bodies were the payers. The payers were the fund. The fund was the retirement.
These are the same sentence.
Now look at what Darcy replaced. She tags 4,200 bounding boxes a shift on my training-data line in a converted coal-prep plant, Harlan County, Kentucky — the images and paragraphs your AI assistant learned on. I pay her $14.00 an hour through a staffing shell that classifies her as a contractor. That saves me $1.07 an hour — the employer FICA Social Security would’ve collected from an employee. I kept the $1.07. It doesn’t register. Every hour. Every day. For 9 months now.
You’re doing the math — $2.13 an hour both sides together, $4,400 a year — and you’re right, it’s nothing. I spend more on the parking spot I don’t provide her. That’s the lesson. Stay with me.
The position Darcy fills used to pay $52,000 a year — a data analyst, direct-hire, with full FICA. The employer match on that was $3,978 flowing into the fund Freeman says is running dry. I converted 240 of those positions to contractor staff last November.
Do the multiplication.
$954,720 a year. From one operation. In one county. In a state that was already running out of paying bodies before I bought the building. The fund has been short my contribution for 7 months. No one has called.
Darcy comes to work because the coal mine closed in 2019 and the Dollar General on Route 421 pays $11.25, and $14.00 is the number where a woman with a mortgage and a 17-year-old daughter will sit in a chair for 8 hours and tag faces she’ll never see again. She’s good at it. She’s fast. She is, by any honest measure, teaching the model to do her job. I don’t tell her this. There’s no reason to. The knowledge wouldn’t improve her throughput, and throughput is the only metric I track.
When the model’s trained, Darcy’s position closes. 6 months. Maybe eight. Her $14.00 an hour stops flowing through a county that has nothing else. The Dollar General loses the account. The café on Main loses the Tuesday lunch. It’s the last café. The county loses the tax base of a woman who was, for 9 months, the last paying body in a building that used to process coal and now processes the data your AI runs on.
The server that takes her spot will pay no FICA. It’ll file no return. It won’t buy groceries or keep the lights on anywhere in Harlan County.
The arm does not buy chicken either. Delia bought chicken — the same chicken she processed, at a price her wage made possible. Nine hundred Delias bought a lot of chicken. I’ve eliminated the wages that bought my own product.
Pull back with me. Here’s where most people stop thinking, and I’d like you to keep going.
The Social Security trust fund was never a savings account. It was a transfer system — each generation of workers taxed to pay the previous generation’s retirement, on the assumption that the ratio would hold. In 1960 there were 5.1 workers for every beneficiary. Now there are fewer than three. Freeman sees a productivity gap. I see a payer gap, and the distinction matters, because productivity is what happens when you produce more with fewer bodies. Fewer bodies means fewer payrolls. Fewer payrolls means fewer contributions. The fund needs payers. AI removes the payers.
The productivity gain is real. It accrues to the balance sheet. It doesn’t accrue to the fund, because the fund was never wired to the balance sheet. The fund was wired to the payroll, and I’ve cut the payroll.
The productivity is mine. The shortfall is yours.
“For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.” — Matthew 25:29
Christ did not redistribute the talents. He took from the unproductive and gave to the man with the highest return. I’ve always read that as a description of the market. The market is finally reading it the same way. The productive economy no longer requires the body. The body was the tax base. The tax base was the fund. The fund was the retirement. Each link depended on the one before it, and I’ve removed the first link.
“The rich ruleth over the poor,” Proverbs says, “and the borrower is servant to the lender.” Solomon was describing the architecture, not the rate. The trust fund is the borrower. Delia’s replacement is the servant. The arithmetic is the arithmetic.
Now I want you to see the part I do not look at.
The demand goes somewhere. Someone sent me the demand curve for the goods those 240 data workers and 900 evisceration hands used to buy. It’s in a folder I haven’t opened. I’m told there’s a 10-year problem with the trust fund projection. I haven’t looked. The quarterly number is the best I have ever booked. I am, on the whole, content.
You will hear a senator propose to tax the robot. I want you to understand this clearly. The senator who proposes to tax the arm is proposing to reverse the one incentive structure that makes the arm profitable. Which means he is proposing to make the arm unprofitable. Which means Delia stays on the line at $19.75 an hour. Which means the chicken costs more. Which means his constituents pay more for dinner. Which means he loses his primary to a challenger who promises to bring the price back down. The senator will not tax the robot. He will make a speech. The chicken will stay cheap. The trust fund will drain.
This is not a prediction. This is the structure.
Delia’s hands still do not close. The severance ran out in April. The arm is running 3 shifts. The chicken is tender — it is always tender — and the FICA contribution that was supposed to fund her check stopped the day the arm started. She kept her part of the bargain. The trust fund cannot keep its part. The reason it cannot is that I found a cheaper way to do what she did, and the market rewarded me, and the reward is the margin, and the margin is the only thing that has ever been sacred.
Darcy tagged 4,200 images today. In 6 months the model will do it for the cost of electricity, and Darcy will stop paying in, and the Dollar General on Route 421 will lose another account, and the trust fund will have one fewer body in the collection column. You asked the AI to draft your lease this morning. The paralegal who used to do that was paying in. She isn’t anymore. Thank you.
The actuaries now date the hospital trust fund’s exhaustion at the second quarter of 2033. I will beat that by several years, and I am not even trying. Hunger is God’s first payroll department. I’ve automated the department. Produce the verse where Christ abolishes the quarterly earnings call. I will wait.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.