Depends on the definition of literacy[1] turns out the low end (basic literacy) is getting better and the high end (full proficiency) is getting worse.
Not the OP, but I recall a section in Mark Fischer's book Capitalist Realism, in which he relayed an anecdote from his teaching days. According to Fischer, a large plurality of his students (in higher education) were functionally illiterate. They had gone through the usual early-ed literacy, and knew the mechanics of how to read, but in practice showed a distinct aversion to actually doing reading.
When asked to read, they would complain that they couldn't, because it was "boring". They had been so consumed by spectacle that the ordinary act of reading words off a page had drifted beyond their reach.
What is going on now is partly a retreat from real literacy back to oral modes of communication and oral modes of thought (i.e. "texting" is really a transliteration of an oral utterance, not a literary form). This is a disaster. - Alan Kay (2016)
That's people attending school, not having reading comprehension -- which isn't just getting something from the text, but understanding precisely what it says and doesn't say -- or having much of an attention span. Just an cursory listen and read to the gibberish in marketing, TV, movies, on youtube, not to mention people in real life, while not showing me a trend, shows me there's lots of FUBAR accepted as normalcy. Idiocracy was optimistic I think, no way is it going to take 500 years.
Reading comprehension isn't the same thing as Critical Thinking. Take a look at a typical community Bible Study group: they'll definitely score high marks for reading comprehension, but (in my own biased perspective) low marks for critical analysis.
I'll grant you that. I do die a tiny bit inside when shows like Last Week Tonight or The Daily Show, both of which imply that heavy research goes into their programming, will have their hosts say "Studies have shown..." but fail to give a citation. A simple, unobtrusive on-screen citation text doesn't take trouble to add, yet would significantly boost the shows' credibility - and hopefully coax the rest of the media into doing the same.
That's an extraordinary claim. Do you have evidence to back it up? Because from a cursory glance, studies seem to show the opposite: https://ourworldindata.org/wp-content/uploads/2013/03/ourwor...