The problem is it might be worth it to the company, but likely not to you - a 5% productivity bump likely results in $100k a year.

You really think there's zero correlation between productivity and wages? Sure, it's noisy and you might stay at $100k or even get fired. But I'd say the expected wage value of 5% higher productivity on a large sample is at least 3.5% or so.

Companies aren't paying for tokens so that their employees can capture the gains.

The one man and the dog at the Carolina spinning factory earn far more than their equivalents in Birmingham.

Everyone else will be 5% more productive. Then no one is "more" productive. So everyone has a higher output, but the same wages and hours worked. There was only a gap when usable AI first came out, some contractors could do the same quantity of work in less time and enjoy time off or do more jobs. Now the gap has closed or is closing. And using AI now is more about not being less productive than peers who do use it.

That's not how productivity works. It's not a zero-sum game.

If all construction workers can build houses 5% more efficiently, that's not the same as nothing changing. Depending on supply and demand, it means 5% more houses are built, or houses are 5% cheaper, or maybe 5% bigger, or some combination. Whether or not the construction workers all get a raise or 5% get fired (or both) depends on that supply and demand, but historically they often get a piece of the growing economic pie.

Why would the company pay more when they can just not pay more? The only things I can see happening is they might lower prices as competition ramps up, or in general as there is more supply for the same cost.

If there's sufficient demand, that's just what happens.

To try and explain one path: Company A doesn't raise wages but makes 5% more money. Company B pivots from Industry B into construction (because suddenly construction is having 5% fatter margins), and hires workers at more competitive wages to poach them from Company A. Company A forces to raise wages.

If there's a demand ceiling on housing it's a different story though.

More like company B purchases a construction company and changes nothing but number go up for shareholders while wages stay stagnant for people producing actual value, as they have for decades.

If labour supply is fixed and productivity goes up then the value and demand for labour goes up, driving up wages

Why would demand for labor rise if productivity rises?

See the increase in CEO wages vs the increase in worker wages over the last 20 years of you want to know where that 5% will almost always go.

"Historically" is doing a lot of work here. It's a well-known fact that while productivity kept increasing, wages have stagnated since the 70s.

So you're right in an academic sense, but not for any practical purpose whatsoever, in terms of how it'll affect economy now.

Or, with current US policy, the top 10% will get 6% richer and you'll get 1% poorer. Sure, the pie can grow, but you won't (unless you are in the top 10%) get any of it.

large companies aren’t buying subscription plans. my org has a 2k per month token budget per person and starting to explore optimizations like automatic model routing.

There is no evidence that these tools provide a 5% bump, if anything they are providing a 20% liability (pulling random numbers is fun).

Also where is the evidence that the workers have ever benefited from productivity bumps? The only thing that happens is surplus gets captured by the owners while workers are forced to do more.

Bad deal all around.

You're saying this like I would see that 5k in my bank account. If I'm 5% more productive that probably wouldn't even make it into annual review, let alone pay.