I see no reason to think that their pay will not increase. They can now produce 2-10x the amount of content. Did compilers decrease engineers pay because they performed a large portion of the work compared to writing assembly?
Machinery and automation also increased the output of individual workers but workers don't own the means of production so they didn't see the benefits of increased income. If you think engineers are any different then I've got a chatbot to sell you
A big issue here is "production" is basically anything that happens in front of a computer. Individual workers will be fired, yes, but entire companies, sectors even, can now be made obsolete overnight. What happens when thinking is no longer a requirement for any job?
Why does the cost of a shirt matter when people can't afford housing? We can create dwellings much more effectively than previous, especially high quality and high density ones
So far in engineering, as tooling makes us more productive we're just tasked with building more and more complex widgets.
Taking web development as the example - compilers, bundles, linters, git, hosting services, even new languages all made us more productive. Companies could have fired half the engineers and kept building high quality, mostly static sites for their content marketing. Instead we took all the productivity gains and started building every website with the complexity of Facebook.
The risk won't be when we're able to use code assistants, the risk is when an AI can produce deployable code and infrastructure directly. As long as any dev is needed in the middle most businesses won't realize they could cut some engineers because most businesses honestly have no idea what is done on the engineering side.
Can you imagine if you had time for all of your side projects because all of the bullshit you (presumably) have to do now for money was automated away? I cannot understand warning people "oh no, can you imagine not having to waste your life doing bullshit for other people?"
Same goes for engineers. Just wait.