A factor I didn’t see you include is changing the percentage of work performed by top engineers vs average and poor engineers. Here is one article aimed at the general labor pool,
But the effect is extremely pronounced in software engineering, much more than average across labor fields. While the increase in performance may be 1.05, it is being applied to the top performers who are much more above baseline than that indicates. From recent research on the topic (https://80000hours.org/career-guide/personal-fit/):
“A small percentage of the workers in any given domain is responsible for the bulk of the work. Generally, the top 10% of the most prolific elite can be credited with around 50% of all contributions, whereas the bottom 50% of the least productive workers can claim only 15% of the total work, and the most productive contributor is usually about 100 times more prolific than the least.”
So what we are seeing happening is the low end workers are getting let go and not replaced. The mod tier to a lesser extent, and that top 10% are doing more and more of the work. This alone, changing the ratio of work hours to more heavily favor the most productive workers, has a big impact. And then amplifying them is far more effective than amplifying the average or bottom tier of worker.
Long story short (too late) I think even 1.2 is too low given the actual workers are between 10x and 100x the ones who are getting let go.
A factor I didn’t see you include is changing the percentage of work performed by top engineers vs average and poor engineers. Here is one article aimed at the general labor pool,
https://fortune.com/2025/08/26/stanford-ai-entry-level-jobs-gen-z-erik-brynjolfsson/
But the effect is extremely pronounced in software engineering, much more than average across labor fields. While the increase in performance may be 1.05, it is being applied to the top performers who are much more above baseline than that indicates. From recent research on the topic (https://80000hours.org/career-guide/personal-fit/):
“A small percentage of the workers in any given domain is responsible for the bulk of the work. Generally, the top 10% of the most prolific elite can be credited with around 50% of all contributions, whereas the bottom 50% of the least productive workers can claim only 15% of the total work, and the most productive contributor is usually about 100 times more prolific than the least.”
So what we are seeing happening is the low end workers are getting let go and not replaced. The mod tier to a lesser extent, and that top 10% are doing more and more of the work. This alone, changing the ratio of work hours to more heavily favor the most productive workers, has a big impact. And then amplifying them is far more effective than amplifying the average or bottom tier of worker.
Long story short (too late) I think even 1.2 is too low given the actual workers are between 10x and 100x the ones who are getting let go.