• Workers in the future may face longer hours, more years of labor, and more productivity pressure.
• A McKinsey report said future generations would pay for low birth rates and people living longer.
• Elon Musk and Jeremy Grantham have both warned that population decline is a huge threat to humnity.

As declining birth rates lead to a youth shortage and a surfeit of older people, future generations of workers face longer hours, more years in the labor force, and more pressure to be productive.

"Absent action, younger people will inherit lower economic growth and shoulder the cost of more retirees," reads a McKinsey Global Institute report published Wednesday that examines the demographic time bomb.

The authors said a combination of more workers, more hours of work, and higher productivity would likely remedy the problem. They also touched on lengthening people's working lives as part of the solution.

They estimated that a German worker would have to work an extra 5.2 hours a week to keep the nation's living standards rising at the same rate as it has since the 1990s, assuming labor force participation doesn't rise.

Working-age populations have historically powered their nations' economic growth and borne the costs of caring for older generations. That balance is becoming more and more lopsided in many advanced economies as people have fewer children and live longer.

Baby bust

Tesla and SpaceX CEO Elon Musk has been one of the loudest voices on the subject of demographic doom.

"Population collapse due to low birth rates is a much bigger risk to civilization than global warming," the world's richest man posted on his X platform in August 2022.

"Just have kids one way or another or humanity will die with a whimper in adult diapers!" he said in a post last May.

Jeremy Grantham, asset manager GMO's cofounder and long-term investment strategist, sounded the alarm during a Rosenberg Research webinar this month.

He pointed to Japan, where nearly 30% of the population is over 65, and the birth rate slumped in 2023 to a record low of 1.2 children per woman — far below the replacement rate of 2.1. Grantham described the decline as "cataclysmic."

Grantham also said South Korea's birth rate of 0.7 leaves one grandchild to support eight aging grandparents. "It does not compute, as you can see."

He added that population decline put the stability of human civilization at risk, and he agreed with Musk that it's "a very big threat, and it's in the data, and it's not to be denied."