Illiteracy a Drag on Industrialized Nations’ Economies, Study Finds : Labor: U.S. workers not only ones often lacking basic reading and writing skills, think tank says. Jobs requiring minimal education are in decline.

U.S. workers, denigrated as illiterate by a top Japanese politician, are not alone.

A new study by the Organization for Economic Cooperation and Development (OECD) paints a picture of widespread functional illiteracy that, according to the 24-nation think tank, is handicapping economic performance in the industrial world.

“Estimates vary widely according to definitions, but it is conceivable that about one-third of workers could do their jobs better if they were able to use basic reading and writing skills better,” the report concludes.

“In OECD countries in general, productivity increases that could be realized through technical advances will not be achieved until human resources are used in a better way. And literacy is an important part of that,” Donald Hirsch of the organization’s Center for Educational Research and Innovation said.

Illiteracy is a touchy issue.

Labor Secretary Lynn Martin readily acknowledged during an OECD conference that 20% of U.S. high school graduates could not even read their diploma.

But when Yoshio Sakurauchi, veteran Speaker of Japan’s lower House of Parliament, said American executives could not give written instructions to their workers because 30% of them were unable to read, he started a big diplomatic flap.

The OECD report, carried out by Lauren Benton and Thierry Noyelle of New York’s Columbia University, avoids comparisons between the United States and Japan. But it provides clear evidence that poor reading and writing skills are commonplace.

* A 1989 government survey showed that only 62% of Canadians met most everyday reading demands.

* The German Commission for UNESCO estimates that there are between 500,000 and 3 million illiterates in Germany.

* One in three workers surveyed at a car factory in Sweden was in need of basic adult education.

The OECD’s findings dovetail with those of the United Nations Educational, Scientific and Cultural Organization, which reported recently that many people in industrialized countries could not read and write adequately for their jobs.

UNESCO cited a 1990 U.S. government study that showed a distressingly small number of American high school graduates could locate specific information in news articles, read a bus timetable or calculate the cost of a meal from a menu.

One of the main findings of the OECD probe is that governments should not assume illiteracy is limited to small, underprivileged sections of the population, such as immigrants.

“We believe no country can be complacent,” Hirsch said. “Those that think everything is fine, but have never carried out educational tests to prove it, should do so, because the complacency might be misplaced.”

One country that has been doing just that is France, and the results are shocking.

The Ministry of Defense estimated that of 412,299 young men between ages 18 and 23 who were called up for their military service between April, 1990, and May, 1991, only 80% could read and understand a 70-word text.

The OECD sees the problem as one of rising literacy requirements at work, not falling educational standards.

“New jobs requiring new mixes of skills are being created while unskilled industrial jobs are declining,” the report says.

Service jobs are also setting a greater premium on skills in communications and retrieving and analyzing information.

The OECD said a growing number of employers now recognize that deficient basic skills and functional illiteracy--an inability because of poor reading and writing to participate fully in economic and community life--are a cost to their operations.

A recent survey found about one-third of Canadian firms had serious difficulties in areas such as the introduction of new technology and productivity because of poor labor skills.

The results can be costly. Researcher Larry Mikulecky has suggested that U.S. firms lose nearly $40 billion annually because of illiteracy, according to the OECD.

It says there is no way of knowing how near the mark these estimates are, but it cites “compelling” evidence collected by U.S. economist Edward Denison that more than half of the productivity increases in the U.S. economy between 1929 and 1969 can be associated with on-the-job training and learning.

Despite the scale of the problem, the OECD says programs to improve adult literacy are patchy in many countries.

While more research is needed on which methods work best, it said there are signs worker literacy is more likely to improve with schemes based at the workplace than in outside schools.