Jared Henderson has a thoughtful Substack post about literacy statistics and the "literacy crisis." Many statistics thrown around in the public square about this issue are misleading or ill-sourced.
Henderson spends a lot of time revisiting his prior commentary on the issue, acknowledging that some of what he said previously was probably wrong or overstated, and sourcing the common misleading statistics. I'll skip that here.
The most essential point is that there are different levels of literacy and commonly cited statistics on point frequently don't disclose what level of literacy they are talking about. They also often cite statistics about literacy in the English language, which is appropriate for many purposes, but neglect to mention that many people in the U.S. who are not literate in English are literate in another language.
Level 1 is minimal basic literacy, and about 8.1% of adults in the U.S. either could not participate in the survey or can't attain this basic level of literacy, although even some people below Level 1 literacy might be able to read a simple story to their children, recite the alphabet, or read a street sign. Many people with Level 1 literacy would struggle to graduate from high school at all.
Level 2 is the literacy level of typical non-college bound high school graduates.
Level 3 is the literacy level of a college bound high school graduate and about 57.5% of Americans have that level of literacy (other sources have put this figure as low as 46%).
Levels 4 and 5 are the literacy levels, roughly speaking, of above average college graduates and people who have graduate degrees.
An OECD report puts the United States in the middle of developed countries for literacy levels:
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