Report: The Economic Impact of Illiteracy on North American Society


Michael Maloney Illiteracy

The Good News

  • Some of us are doing okay. 65% of the kids are at or close to grade level.
  • 50% of secondary school graduates enter post-secondary programs.*
  • College & university graduates earn 33% more than non-graduates.

The Cost

  • English speaking North America (Canada and the U.S.A.) spends 500 billion per year on education.***
  • $10,000 per year per student to the end of secondary school.***
  • Both countries are in the top third in funding public education.*

The Bad News

  • We are in a literacy crisis. Only 18% of ninth grade students complete a degree.*
  • Only 17% of North Americans tested out at the fourth of four levels of literacy in international testing administered in 56 countries

We Placed

  • 25th in math
  • 17th in science
  • 14th in reading.

We pretty much suck at the basics, which means that we don’t do well with the more difficult advanced subjects (e.g. math, physics, chemistry, biology etc).****

* National Center on Education and the Economy

** U.S. Dept of Labor, Bureau of Labor Statistics.

*** U.S. Department of Education, National Center for Education Statistics. (2011). Digest of Education Statistics, 2010 (NCES 2011-015), Table 188 and Chapter 2 .

**** New York Times, Dec 7th, 2010

Illiteracy Affects Many Facets of Each Person’s Life

Financial Impact

  • Earnings for high school graduates are stagnant at approximately $30,000/yr.
  • Earnings for non-graduates are currently less than they were in 1970.
  • 80% of high school drop-outs make less than $30,000/yr.
  • Across North America, a student drops out of school every 16 seconds.
  • There are numerous reasons for students dropping out, but many of them do so because they are not being academically successful.
  • Many of them are illiterate.

Socio-Economic Considerations

  • 38% of the children of dropouts live below the poverty line. 14,000,000 children in the U.S.A. and 1.5 million in Canada.
  • 60% of foster children never graduate from high school.
  • 65% of unwed mothers are functionally illiterate.
  • Illiterate adults more frequently raise illiterate offspring creating a cycle of intergenerational illiteracy.


  • 80-85% of our 32,000 prison inmates are illiterate.*****
  • Each incarceration costs $80,000/ inmate per year approximately $30.Billion annually
  • It costs $20,000 to send a student to post-secondary education, or 4 times that much to keep an illiterate behind bars.

***** U.S. Department of Education, Office of Educational Research and Improvement NCES 1994–102


  • Illiterate individuals have significantly shorter life expectancy. While alive they also use more health care (if it is covered by government health plans).


  • Non-white North American students start behind in Kindergarten and the achievement gap widens throughout school.
  • Non-white immigrant students achieve as well or better than native born white Canadians.

Lost productivity

  • Estimated to be $225 billion annually. +
  • Illiterate workers are less trainable, have more accidents, cause more breakdowns and use more sick days than their literate peers.

+ U.S. Dept. of Labor Statistics

Lost Competitiveness

  • 50+ % of engineering doctoral degrees and 34% of those in the hard sciences, (Physics, Chemistry, Biology and Engineering) during this past decade were awarded to Indian and Asian students.
  • 10 years ago, they stayed here to work, now they are returning home to compete against us.
  • Until now even when manufacturing went south and east, we could power the economy with innovation. We are quickly losing that advantage and are in danger relying even more heavily on exports of our natural resources to maintain our economy.
  • Hundreds of thousands of skilled jobs remain unfilled due to lack of suitably trained candidates.

The Rest of the Story

  • We know how to solve the problem. We have known for almost forty-five years.
  • We have never had the political will to implement the science that the research has provided in Project Follow Through.


  • Consumer ignorance: Parents, teachers and students cannot discern effective programs from ineffective ones.
  • Push back against change: Current stakeholders (unions, colleges of education) do not want programs which will clearly demonstrate progress, or the lack of it.
  • Enhanced accountability: Effective programs can track progress and enhance accountability at all levels.

If you want to learn more about solving the illiteracy problem, read my blog articles on teaching reading as a start. I will add more articles to cover other basic literacy skills each week.


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