This Wikipedia article has some interesting information about literacy in the US, and how it has been measured in different studies.

If you barely know how to read, you won't be reading too many books. Twenty years ago, the area of NS where I live was found to be the hot spot of illiteracy in the province. An astounding number of older people (60+) were/are unable to read at all, and those thirty and up weren't much better off. Younger people were more likely to be able to read, but still an alarming number were deemed 'functionally illiterate' - not able to understand what they read, small reading vocabulary, etc.

The area includes a lot of isolated fishing communities, and until recent years, schooling was less important than fishing for your living. So younger people, even though they were getting better access to education as schools improved, often had parents at home who couldn't read to them or help them learn.

After the study came out, lots of adult literacy projects were launched in the area, and the ones I knew about were well attended, but no new studies have been done, so I don't know how successful they were.

Until I moved here, I'd only met one person who I knew couldn't read. Here, I was often shocked by finding yet another person my age or younger who was illiterate and being helped along with jobs by friends who read for them whenever possible and necessary.

http://en.wikipedia.org/wiki/Literacy_in_the_United_States