Our increased efficiency producing manufactured goods, technology, food, and clothing has already produced this effect in healthcare, education, childcare, and more. That's how the effect works.

The only question is, are we prepared to deal with the social ramifications of the consequences? Are we ok with new crises? Imagine the current problems dialed up 10x. Are we prepared to say, "the market is in a new equilibrium, and that's ok"?

Healthcare, education and childcare are either free or affordable in almost all developed countries.

Even in places where these services are expensive, it does not seem to be because the workers are highly paid.

They are not free, they are paid for by taxes. And in pretty much all countries, irrespective of funding model, these services have increased in price much faster than general inflation. This is the Baumol effect in action.