The latest report to sound this alarm was published last month by the National Endowment for the Arts, which concluded that employers ranked reading and writing as the top deficiency in new hires. The study, “To Read or Not to Read,” was based on a variety of data sources including a 2006 report by the Conference Board titled “Are They Really Ready to Work?” which concluded that today’s American workforce is “woefully ill-prepared” for the demands of the workplace.

However disparate the sources of the data, the picture presented is one that NEA Chairman Dana Gioia described in the report’s preface as “simple, consistent and alarming.” The decline in Americans’ reading and writing skills has “demonstrable social, economic, cultural, and civic implications.” Workers who cannot read and write well earn less and have higher unemployment rates. Employers, meanwhile, must spend more time and money on what is considered a basic skill.

Linda Barrington, research director for the Conference Board and an author of its report, says that even among recent graduates of four-year colleges, new hires were unable to write effective business communication, read analytically or solve problems.

“It’s nice that they are reading e-mail and reading comics,” Barrington says, “but if they can’t turn it into a communication tool, that is where the breakdown happens on the employer side.”

The Conference Board study was prompted by a closed-door meeting two years ago with Fortune 100 CEOs who worried that the skills gap would only quicken the offshoring of American jobs.

Literacy levels today are similar to those in 1970, according to the Nation’s Report Card, the federal government’s annual assessment of literacy levels. But the economy has changed drastically since then. Workers today need to be able to read and analyze complex, often very technical material, like manuals for car mechanics, to succeed in most jobs.

“Jobs that don’t have much in the way of skills have moved out of the United States or are not living-wage jobs,” says Timothy Shanahan, past president of the International Reading Association and a professor of urban education and reading at the University of Illinois at Chicago. That means even jobs that are considered low skill require workers to read at an eighth-grade level, he says.

“Schools are not demanding students to read what the workforce is demanding them to read,” Shanahan says.

Bill Kozell, who runs Dr. Goodwrite, a Wayne, Pennsylvania-based company that helps workers improve their writing, says the problems come down to basic errors in grammar, spelling and tone that can nonetheless be disastrous for a company and its image.

“If you can’t make sure an e-mail is grammatically correct, what else are you cutting corners on?” says Kozell of the message a poorly written e-mail can send to a client. “Companies invest millions of dollars in their image and it can be undone in a matter of minutes by one sloppy e-mail.”

Financial services company Capital One, Kozell says, is one employer that offers remedial English courses to employees.

But the skills gap has become a national issue that has prompted federal legislation—the Striving Readers Act of 2007—calling for greater investment in basic reading and writing skills training for high school students.

Barrington says employers should develop a more unified approach toward improving the skills of American students rather than funding a hodgepodge of programs meant to address the problem. Just what that approach should be, however, has not yet been determined by researchers.

“It’s where we are looking next,” Barrington says.

—Jeremy Smerd