AI Takes Our Jobs Away – If We're Lucky

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Technology forecasts can sound like threats: "AI will replace your job." If you listen to the tech elites, this seems to be a question of not if, but when. The forecasts from Silicon Valley are clear and radical.

Sam Altman, the head of OpenAI, argued in his 2021 essay "Moore’s Law for Everything" that we must prepare for a world where AI takes over the majority of value creation. As a consequence, we will inevitably need a universal basic income, financed by the astronomical profits of a few AI corporations.

Elon Musk echoes the same sentiment. Work, according to Musk, will be "optional" in the future. Jensen Huang, CEO of NVIDIA, recently advised parents against teaching their children to code – AI will take care of that. And Emad Mostaque of Stability AI went a step further: In five years, according to his provocative thesis, there will be no human programmers left at all.

This rhetoric likely also serves the stock price. Those who portray their AI as omnipotent please the shareholders. But even discounting the hype, the core remains plausible: the technology is powerful enough to shake up our world of work.

The Luddite Reflex: Braking to Preserve

It is understandable that these forecasts cause fear. Work is more than income for us. It is identity, belonging, and pride. It is therefore not surprising that the call for the "emergency brake" is getting louder. In 2023, over 1,000 scientists and entrepreneurs, including Elon Musk and Steve Wozniak, called for an immediate, six-month pause in training AI models more powerful than GPT-4 in an open letter. The motive: fear of losing control.

Protest is also stirring in Germany. For example, the service union ver.di called for an "operational stop of generative AI" in companies as long as issues concerning copyright and personality rights are not clarified. Here we see modern variants of the Luddites of industrialization: the attempt to freeze the status quo to prevent disruptive pain.

However, I would like to present an uncomfortable thesis here: no matter how unsympathetic and alien the tech elite in Silicon Valley may seem to us – we should hope that they are right.

Because we depend on the massive change they describe. We must not only tolerate it, but actively accelerate it. Moratoriums or overly cautious regulation would be like an exaggerated immune response of the body, where the attempt to ward off the "foreign" ultimately causes far more damage to the organism than the disease itself.

The Real Problem: Our Demographics

Let's briefly set aside the science fiction scenarios from Silicon Valley and look at the German reality: we are heading towards a demographic cliff that is almost unprecedented in the history of modern industrial nations. To understand the scope, we need to look at a simple mechanism of economics.

Economic power is, in simplified terms, created from two things: how many people are working – and how productive they are. In recent decades, OECD countries have had a "demographic dividend": the baby boomers entered the labor market, increasing the labor supply, keeping wages stable, and simultaneously increasing demand. This cycle has now completely reversed.

The International Monetary Fund and the OECD warn: without countermeasures, global growth between 2025 and 2050 will be about 1.1 percentage points lower than before – and about three-quarters of this decline is directly attributable to demographic change.

Why? Because an aging economy bleeds out in three directions simultaneously:

1. Labor shortage: Fewer employed people mean less production capacity. This is the most rapidly visible damage.
2. Structural change: An aging society buys fewer cars and more care. So we are shifting from industrial goods that are easily automatable to services that have so far been difficult to scale.
3. Capital consumption: Retirees "dissave" to cover their living expenses. This reduces the global capital stock and tends to drive up interest rates. Precisely at the moment when we massively need capital to invest in technology, money becomes more expensive.

A Look into the Crystal Ball: South Korea

Anyone who wants to know what this means in practice should look to South Korea – the "demographic zero point." With a fertility rate of 0.72, one of the lowest in the world (far from the necessary 2.1), potential GDP growth is projected to tend towards zero by 2050.

South Korea is responding with the most aggressive automation strategy in the world: over 1,000 industrial robots per 10,000 employees – a global top figure. Not because robots are cheaper. But because without them, it's no longer possible. And at the same time, the country shows us another problem: while the population is shrinking, highly qualified talent is emigrating. Technology can compensate for the loss of mass, but it can hardly compensate for the loss of innovative power.

This is why we should welcome AI and the resulting automation – even if it seems extremely disruptive and frightening. The alternative – the desperate attempt to save the status quo with our dwindling human workforce alone – is heading towards a mathematically unavoidable collapse.

Migration is Not a Rescue

An obvious answer to this dilemma is migration. However, the available data paint a sobering picture. Aladin El-Mafaalani, Professor of Migration and Educational Sociology at TU Dortmund University, shows that in the next 15 to 20 years, around 1.2 to 1.3 million people will retire each year, while only about 800,000 young people will enter the labor market. This creates a structural gap of 400,000 to 500,000 workers per year.

At the same time, he points out that migration in recent decades has only partially compensated for this imbalance. Even optimistic immigration scenarios therefore do not mathematically close the emerging gap. Furthermore, Germany competes in the global race for skilled workers with countries like the USA and Canada – and often holds the weaker hand.

Lack of digitalization, high tax burdens, Kafkaesque bureaucracy, and a persistent allergy to the English language in the labor market – all of this diminishes the enormous pull factor that our pretty lederhosen might have. Betting on a strategy for which both political acceptance and location attractiveness are lacking is not a strategy, but wishful thinking.