> If we're creating an economy where decent jobs only exist for people in the top ~20% of the ability curve, how do we handle that?

The most important thing here is to do something about the cost of living, i.e. the price of necessities.

Housing isn't inherently as expensive as it is in the US, it's made that way on purpose. Healthcare likewise. If you only make $25,000/year and housing is $20,000/year and healthcare is $12,500/year, you're screwed. If you only make $25,000/year and housing is $10,000/year and healthcare is $5000/year, you're not.