Work smarter, not harder. That's the way it has been going for thousands of years of civilization and social advancement. We still need low-skilled work, but those will be fewer and lower paying the more people compete for those jobs. And skilled jobs will grow and wages will increase as employers compete for those skills. The intelligence and education required to stay in the middle class will continue to increase.
There will be incentive to create tools and technology to use those lower-skilled, less expensive workers just as there are today. You don't need a comp sci degree to work on an automotive computer system to repair cars. The same gear-heads (I use that term affectionately) that worked on cars in the '70s do so today. Tools will make today's high-tech jobs require less skill to do more advanced work.
Who would have thought in 1970 that, 40 years later, functional literacy would require understanding of how to use computers? Or that we would all carry those computers in our pockets. In 40 years, who knows what "functional literacy" will look like? Everyone able to program a computer? Probably, but "programming" won't look much like it does today. The only thing that matters in the end is how fast an individual can learn and adapt to a changing world.