In a 2021 speech on Italy’s birth rate crisis, Pope Francis referred to the situation as a “demographic winter that is cold and dark.” As global birth rates decline and populations age, societies face economic and social challenges, but the rapid rise of Artificial Intelligence (AI) could transform this crisis, potentially offsetting labor shortages—but not without new risks. At the very least, the rise of AI requires a rethinking of the traditional solution for declining populations and labor shortages: increased immigration. 

　　Global Population Decline Is Real and Represents a Crisis

　　Many leaders and leading thinkers have woken up to the global crisis of population decline. According to a Lancet study, over half of all countries have birth rates below the 2.1 children per woman required to maintain a nation’s population. That rises to 75 percent by 2050 and 97 percent by 2100. The average birth rate for Western Europe fell to 1.53 in 2021, according to Eurostat and the Institute for Health Metrics and Evaluation. The US hit a historical low of 1.62 birth rate in 2023, according to the CDC. 

　　South Korea is the most stark example with a mere .75 children per woman in 2024, a 70 percent birth gap. Stephen Shaw of XY World Wide has developed a population half-life that translates a birth rate into years to reduce a population by half. He calculates that South Korea’s half-life is 20 years. China fares better, but its population is expected to almost half, from 1.41 billion in 2021 to 730 million in 2100 according to a New York Times article on the ramifications of population decline. 

　　This declining birth rate presents challenges for societies for a number of reasons. First, the average age of the population increases and as the older population becomes larger than the younger population, there aren’t enough workers to fill jobs or to pay into social security to support the older members of the population. According to the Social Security Administration, in 1960, there were 5.1 workers contributing to Social Security for every beneficiary; that’s estimated to fall to 2.1 by 2040. They estimate that for the system to function, that ratio needs to be 2.8, and further estimate that Social Security will be depleted by 2035. 

　　An aging population also puts strains on the healthcare system with increased demand for elder care workers, costs for healthcare increases for the elderly, need for long term care facilities, and elderly requiring an increasing percentage of healthcare workers, leading the Association of American Medical Colleges to predict a shortage of up to 139,000 physicians in the US by 2033. As the chart below shows, medical costs rise significantly as someone ages, with people aged 85+ costing 5.4 times more than prime working age people 19-44 years old. The Centers for Medicare Medicaid Services estimate that Medicare will be depleted by 2036.

　　Additionally, when there is a declining working age population, the national GDP declines which, in turn, makes it difficult for the country to pay for its national debt. It is for these reasons that the commonly proposed solution is the immigration of new workers from the underdeveloped world into the developed world. 

　　The Rise of AI: Transforming Labor and Economic Growth

　　Amid these demographic challenges, a technological revolution—Artificial Intelligence—offers both solutions and new dilemmas. The rule has been that if we are not producing children at a replacement rate, then we need to import new workers from other countries in order to continue to grow our economy. But this dictum ignores what is almost certainly the largest existential shift in the history of human labor: Artificial Intelligence (AI).

　　Experts estimate AI’s potential market value at $50-$55 trillion, representing the total value of human labor worldwide (the value of that labor is estimated based on IMF and ILO data). It should be noted that PWC estimates that AI will increase the global economy by $15.7 trillion by 2030; increasing the North American economy by 14.5 percent through increased productivity (42 percent) and “consumption-side effects” (58 percent), i.e. increased consumer spending driven by AI innovations.

　　At the Abundance 360 conference in March 2024, Elon Musk said that, by the end of 2025, AI will be smarter than any human, and by 2030, “digital intelligence will exceed all human intelligence combined.” What many people fail to grasp is that AI isn’t just getting incrementally better every year, it’s getting exponentially better every year. In October 2024, at the Future Investment Initiative conference, Musk said, “AI is getting 10 times better per year. Four years from now that would mean 10,000 times better.” Which is to say that by 2030, the AI you interact with will be incomprehensibly 10,000 times smarter than the smartest person on earth and a million times smarter than the smartest human two years later.

　　Musk went on to say that by 2040, “there will be more humanoid robots than there are people; there will be at least 10 billion humanoid robots.” Starting this year, Tesla aims to build 10,000 of their Optimus, humanoid robots and is already testing them in their auto factories. They plan to scale that up to 100,000 per month with a target price of $20,000 in the coming years, although prices are expected to be closer to $30,000 in the near term. And there are a few other such companies with comparable humanoid robots, similar plans to scale up production, and similar price points, such as the Open AI, Microsoft, and Nvidia-backed Figure F.02, which is already being tested in a South Carolina BMW factory, and the Chinese-made Unitree G1.

　　Policy makers, economists, business leaders, and researchers are either willfully ignoring the impending conflict between high rates of immigration and the expansion of AI into the labor force, or they have failed to detect it.

　　One can reasonably argue about whether Musk’s predictions are precisely correct, but they are directionally correct. And it’s in this landscape that its necessary to consider the impact of this level of Artificial Intelligence on labor. We are at a point where it is already possible for AI to start replacing entry-level jobs in computer programing, accounting, research, etc. At the pace at which AI is improving, it will be increasingly possible for AI to replace most entry-level and mid-level knowledge work within the next few years. Additionally, with AI powering humanoid robots with the ability to walk fluidly, with high levels of manual dexterity, vision, voice, and hearing on par with humans, all manual work can begin to be replaced. 

　　South Korea’s rapid population decline and aging may well make it the first country where there are more humanoid robots than humans. What does it mean to have a dwindling human population that is dwarfed by its non-human population of superior intelligence?

　　Some of this will be highly beneficial as it could solve labor shortages, such as the growing elder care shortage. But what should be clear is that AI, in its many forms, can surely fill the gap of a shrinking labor-age population in the developed world moving forward. In fact, it may create an existential crisis as it increasingly competes for human jobs. AI doesn’t take vacations; it doesn’t have sick days; its capable of working 24/7; it doesn’t go on strike; it can instantly scale up nearly infinitely or down based on market demand; and it may continue to get 10 times smarter every year.

　　Another expected benefit of AI is in helping to cure diseases, grow replacement organs, slow aging, or even reverse aging; this is fantastic but further complicates the labor dynamics of aging populations. Longevity experts now believe it’s possible for most people to live a healthy, active life beyond 100. Some experts, such as Dr. Peter Diamandis, believe that we are fast approaching longevity escape velocity, a concept where scientific breakthroughs extend life by more than a year for every year you remain alive; dramatically extending life by 40 years or more. If such extra longevity comes to pass, it will require a rethinking of how long people work and how fast a population declines with less than replacement birth rate, further compounding the problems.

　　Policy: Addressing Population Decline in the AI Era

　　Regardless of whether AI is viewed as totally positive, totally negative, or somewhere in between, it demands that old economic theories, requiring population growth to grow an economy, need to be revisited. The belief that developed countries like the US need to import substantial numbers of laborers is outdated and will pose a substantial risk by the end of this decade. If AI can effectively perform entry-level knowledge work as well as manual labor (via humanoid robots) at scale, then massive immigration will merely serve to exasperate a future challenge of finding productive work for humans. 

　　Policy makers, economists, business leaders, and researchers are either willfully ignoring the impending conflict between high rates of immigration and the expansion of AI into the labor force, or they have failed to detect it. Population decline certainly poses a strain on societies, causing many cultural and civilizational impacts. But in an era of superior Artificial Intelligence, that population decline need not necessitate a decline in economic growth.

　　In February 2025, the $30 billion investment manager, Ark Investment Management, projected that the confluence of AI and robotics will contribute to a global GDP growth of 7.5-10 percent per year instead of the 3 percent we’ve seen over the past 125 years. This AI-driven growth will likely necessitate a change in how governments are funded, particularly entitlements like Social Security and Medicare, which are funded by payroll taxes. But the growth necessary to fund these entitlements will be there.

　　It will always be valuable to attract the best and brightest people of the world to continue to innovate and enhance our economy. But the era of a need for mass immigration may already be over. Regardless, the effects of AI need to be considered in migration and labor policy moving forward. As AI continues to evolve, will policymakers adjust to the new reality and get ahead of the challenge, or be caught off guard and overwhelmed because they couldn’t recognize the tidal wave heading their way?