That’s absolutely not the conclusion from PIAAC, around 1/50th of the us population in 2013 (320 million) was functionality illiterate:

Four in five U.S. adults (79 percent) have English literacy skills sufficient to complete tasks that require comparing and contrasting information, paraphrasing, or making low-level inferences—literacy skills at level 2 or above in PIAAC (OECD 2013). In contrast, one in five U.S. adults (21 percent) has difficulty completing these tasks (figure 1). This translates into 43.0 million U.S. adults who possess low literacy skills: 26.5 million at level 1 and 8.4 million below level 1

Level 1 – 176 – 225 Most of the tasks at this level require the respondent to read relatively short digital or print continuous, non-continuous, or mixed texts to locate a single piece of information that is identical to or synonymous with the information given in the question or directive. Some tasks, such as those involving non-continuous texts, may require the respondent to enter personal information onto a document. Little, if any, competing information is present. Some tasks may require simple cycling through more than one piece of information. Knowledge and skill in recognizing basic vocabulary determining the meaning of sentences, and reading paragraphs of text is expected.[6]

Adults classified as below level 1 may be considered functionally illiterate in English: i.e., unable to successfully determine the meaning of sentences, read relatively short texts to locate a single piece of information, or complete simple forms (OECD 2013).