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It’s an interesting question. This suggests a 6.2% illiteracy rate in Alabama in 1950. Even assuming that was completely segregated, which was certainly not true, that would get us 132 out of 979 thousand, or 13.5%.
Meanwhile, searching Chicago gets breathless results about 25% “functional” illiteracy…and 20% for the whole state! That’s ridiculous unless the standard of illiteracy in 1950 was much lower. But exceeding Alabama’s 6% or even 13% seems completely plausible.
As for the floor—it’s not actually the cities I was thinking of. It’s the small rural districts across the South and Midwest. I think taking the federal funding from, say, Mississippi shutters a lot of schools. I’m not sure if the budgets back this up, though. If cutting all of the DoEd only cuts marginal state budgets by 10 or 20%, it might be worth it.
It's entirely possible that Chicago is just uniquely bad, as well.
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A major challenge for comparing literacy (or illiteracy) rates across time or different countries is that the measurements are very different. In US, "functionally illiterate" means you can cipher and sound it out, but if it's a sufficiently complex sentence you can't understand it. (For example, some instructions on tax forms.) In developing countries, "illiterate" means you cannot cipher the alphabet (or kanji, as the case may be).
A while back, a student in my Liberal Arts Math class did a deep dive comparing the literacy statistics for US vs. Bangladesh, because some statistics she found suggested that US was doing worse. Turned out that the US stats were for "functional illiteracy" while the study in Bangladesh asked its participants to sound out a few written words.
Not the same thing.
The way it is explained in the UK context is that "functional literacy" is the ability to read a story in a "quality" newspaper like The Times or The Guardian and understand it well enough to answer questions about what happened. That is a much higher standard than just being able to read.
Back in the day, literacy was assessed by self-report. The census taker would ask you "Can you read?" and write down the answer.
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