Secondary school students with NCEA Level 2, even those with a few Level 3 credits, are among the large number of people struggling with functional literacy.

If you're reading this and make it beyond the opening paragraphs, congratulations. You're regarded as functionally literate and capable of fully engaging in society.

Sadly you represent a group that numbers barely above half the population. According to international research, the other 43 per cent are literate enough for day-to-day living but will survive rather than thrive; they will literally function and little else.

The good news is that New Zealand appears to stack up well when compared with other nations.

In a comprehensive 2014 OECD study of adult skills in 32 countries, Kiwis aged between 16 and 65 ranked behind only Japan, Finland and the Netherlands for literacy. We were 13th in numeracy skills, with Japan and Finland again leading the way, but we bounced back to fourth for problem-solving capability.

But the bad news runs between the lines of those bald findings. It shows that close to half of those surveyed make it only to level two in a scale that runs to five. That means they can read things like road signs and simple text, enough to get by. However, they will struggle with anything more complex.

Right now you're thinking of the usual suspects – those who struggled at school and people for whom English is a second or even third language. But if your own numeracy skills are up to scratch you'll realise that 43 per cent is a significant part of the population, too big not to include those whom we might otherwise expect to be well educated and highly literate.

Incredibly, some commentators believe that number includes young people leaving high school at the end of Year 12 with the tick of a NCEA Level 2 qualification, possibly even a handful of Level 3 credits. Some of whom will go on to university.

One of the people blowing the whistle is Josh Williams, chief executive of the Industry Training Federation (ITF).

SUPPLIED Industry Training Federation boss Josh Williams. Blames weaknesses in NCEA for a rise in functional illiteracy.

His organisation represents the large number of businesses that help various industries upskill their workers. It's a multi-billion-dollar sector that is supposed to be pushing Kiwi productivity and preparing us for smarter technology.

But many are struggling with that because those workers often need help with literacy and numeracy before they can even consider higher functions and skills.

Williams believes it affects as many as one million of the country's 2.5m-strong workforce.

"Where my members are . . . [it's] we're happy to help pick up the slack but, for goodness sake, would someone please turn the tap off," he says.

He describes functional literacy as "the ability to contend with the everyday – reading, writing and numeracy in order to make sense of the world, whether that's the news, looking at a statistic . . . ".

But in the workforce that means "if I can read the warning sign that tells me that I need to be wearing ear protection or that this particular piece of machinery requires a particular procedure before it will run, or if my job relies on being accurately able to count things".

For others it can be about taking the next step up to a supervisory role or management.

Many struggle. It's something Paul Jordan sees first hand.

Juken NZ Mill Manager Paul Jordan. His company hires an average of 20 new people a year, and many of them, including ones with a good education, have issues with literacy and numeracy.

The mill manager looks after 230 employees at Juken NZ's Masterton plant. The company has a sawmill and manufactures various timber construction products, including framing.

Every year the plant hires an average of 20 staff as part of its natural turnover. Sometimes more when things are busy. Many of those employees come from the local community for what are largely production jobs, but the company also needs people to fill more skilled, technical roles.

Often the new arrivals struggle with the literacy and numeracy required to function in the workplace.

"Even the young workers coming in that have NCEA Level 2 or even credits at Level 3 don't have functional literacy and numeracy," says Jordan.

"They can get by but when you're asking someone to read an operational job instruction to maintain their personal safety you have to be sure that they understand what they're reading; or you're asking them to put entries into a production management system, where it's important that the numbers are in the correct sequence."

Sometimes that means picking up where the schools possibly left off, at considerable cost to the business.

"We have a fulltime trainer," says Jordan, "His job is to assist people and we hire a tutor to do one-on-one work with staff. That's a direct cost, and then there's the indirect cost of freeing people up from the workforce for the one-on-one tuition."

Jordan is loath to blame teachers – "they do a hell of a job" – but he believes there is a lack of "connection between industry and education".

"NCEA has drifted away from the core concepts that you still must be literate and numerate," he says. "They are getting unit standards for soft skills, not hard skills, so 'I'm finding it too difficult to do mathematics so I'll do environmental studies or I'll do something else', and they get the cross-credits so they have a capacity to learn, but they don't really have the core literacy and numeracy skills that you must have to work in an operational environment."

He thinks it has improved but he remains gobsmacked at the lack of knowledge among some young, educated employees.

"There are some of them that surprise you . . . 'really, you can't do that?' They are so used to using an app for everything."

ITF boss Williams is not surprised. Sadly, neither are many of the country's universities.

Williams says the lack of functional literacy among the workforce is one of the biggest issues raised by the business owners with whom he deals.

"I remember people being spooked about new health and safety legislation and I would go along to a workshop and the first person to pick up the mike would say, 'well, of course the real issue is literacy and numeracy', and everyone would nod."

That lack has become a considerable drag on productivity and aspirations to build a smarter workforce. The financial impact is difficult to define but a World Literacy Foundation report put it at 2 per cent of GDP, which means New Zealand potentially lost a staggering $3.7 billion last year. It puts the global cost at more than US$1 trillion annually.

"If we're into having a skilled workforce, and a productive one, then there's a broader challenge that New Zealand seems to have . . . and what we suggest is that there's no silver bullets in education but one of the biggest fiscal drags, let alone social inclusion drags, would be foundational literacy and numeracy, because it underpins a range of other problems in the workplace."

He too takes aim at the way literacy and numeracy appear to fall by the wayside as students make their way through high school.

The Level 2 used in the international research is equivalent to the reading age of an 11-12 year old, intermediate school age.

"That level of your 11-year-old, that's just you are getting by," says Williams.

His organisation is puzzled about what happens to the many students who earn their NCEA Level 2 qualification in Year 12 but are still no more literate than when they left intermediate school.

"We think that the requirement at NCEA is very loose, too loose. The assessment people call it a validity problem, measuring what you think you're measuring.

"What we think is going on with NCEA is that by dint of achieving lots of standards from lots of areas they have been flagged for literacy and numeracy on the idea that if you can pass this then you must be able to read; if you can pass this you must be able to write.

"There's an inference but it's not actually formally being taught at secondary school and it's not formally being assessed," he says.

Williams points to a 2014 study of adult literacy and numeracy commissioned by the Tertiary Education Commission, which highlighted a "minimum level of competency . . . essential for people to participate in the 21st century".

The study says "approximately 50 per cent of the Year 11 students with NCEA Level 1 and 40 per cent of the Year 12 students with NCEA Level 2 are under the literacy requirement defined in this research . . . the picture for numeracy is similar".

That can leave businesses having to pick up the pieces, Williams says.

"In the end those employers have a right to expect, particularly if the person has been given NCEA Level 2, that these people have a tick in the box for literacy, but they are not."

There is some support. The Government offers subsidies to help businesses upskill their workers. But very little of that is targeted at the A-B-Cs and 1-2-3s.

"$2.8 billion is invested in post-school subsidies for education and training,” says Williams, “and about $23 million for workplace literacy. As a proportion of the total investment in tertiary education it’s very much at the margin, scratching the surface.

"If I was to do only one thing with Vote Tertiary Education I would look at literacy because that is where we can make the biggest difference for the most people."

That would get a big thumbs up from Professor Dugald Scott too.

Maarten Holl Dugald Scott, deputy chairman of the University Academic Programmes Committee for Universities New Zealand. He says universities are having to help boost the literacy of some students.

Universities New Zealand is the "sector voice" for the country's eight varsities, and Scott is deputy chairman of the University Academic Programmes Committee.

He says the country's highest academic institutions are also struggling with the gap in students' functional literacy.

"Universities spend a lot of money and time making sure students have appropriate skills," he says. "All universities are putting more effort into that kind of thing than they used to."

He too believes the problem is a lack of focus on literacy in high school, even for students qualified to enter university.

"In simple terms you can either study a subject like English and pass achievement standards at an appropriate level, but what was brought in a few years ago was the idea that if you were studying some other subject which ought to require literacy, then you could gain literacy credits that way.

"When teachers are marking some subjects other than English, which demands literacy, they may be focused more on the content, say in geography or history or something, other than the literacy skills; their primary job is to see whether the students understand the subject, rather than how good they are at reading and writing."

He believes that is being "tidied up".

The Ministry of Education declined an interview, but it did answer a number of questions sent via email.

It acknowledges there's a problem and says it's working on solutions.

SUPPLIED Ellen MacGregor-Reid, Deputy Secretary Early Learning and Student Achievement, Ministry of Education.

Ellen MacGregor-Reid, Deputy Secretary Early Learning and Student Achievement, admits "we are hearing from employers and others that our technology-rich world is making increasing demands on skills and understanding in language (and mathematics)".

Changes were made to the NCEA qualification between 2010 and 2014 "as part of work to strengthen literacy and numeracy skills across the education system".

"This included the staged introduction of achievement standards aligned to the New Zealand Curriculum levels 6, 7 and 8, the development and introduction of literacy and numeracy unit standards, and progressive strengthening of the NCEA Level 1 to 3 literacy and numeracy credit requirements between 2012 and 2014."

MacGregor-Reid believes these changes will take a few years to embed and produce improvement.

"The current NCEA review . . . terms of reference include specific reference to literacy and numeracy requirements and what these functions might entail in the 21st century."

The latest news on the review suggests the number of Level 1 credits needed will be halved, with a sharper focus on literacy and numeracy. Also, the path leading from learning to either higher education or the workforce will be clearer.

That will be good news to the many industries seeking a smarter, more skilled employee in the modern workplace.

But it's probably too little, too late for tens of thousands of people whose hard work at school qualified them for a life of function, rather than taking flight.

The Learning Wave Learning Wave facilitator Joel Young. He has worked with hundreds of people struggling with literacy and numeracy.

There wasn't a dry eye in the room.

It was Joel Young's first literacy group as a facilitator. He won't forget it in a hurry.

"There was this young guy, early to mid-20s," he recalls. "He had a few tatts on him across his knuckles, a few other bits and pieces; he'd seen the inside of a jail cell at one point, maybe had some gang affiliations."

This young man had been engaged in the work but otherwise kept pretty quiet during the workshops.

"Then on the very last day, everyone has to do a presentation, just a short one in front of the whole group and their managers, and it's usually quite scary for them.

"He got up and talked about how . . . he'd been able to read a story to his daughter for the first time ever."

Young's first story of struggle and success, but not the last. The Learning Wave facilitator has worked with hundreds of other people in the 2-1/2 years since.

Clients include Carter Holt Harvey, Downer, Countdown, Sistema and Farmlands Co-op. The work is supported by the Tertiary Education Commission and its multi-billion-dollar budget for tertiary training and education.

Learners are as varied as the businesses employing Young's services: "Māori, New Zealand European, Niuean, Tongan, Fijian, Fijian Indian and Indian, and that might have been in one room of eight people," Young says. "I remember being able to say thank you in 20 different languages."

In some workplaces, the room can be "full of middle-class white people, male and female".

Many are in their 40s and older, with just enough literacy and numeracy skills to get by.

"People are great at adapting and making do, but there's a cost to that, usually a cost to their confidence and their ability to progress in their careers," he says, "and productivity – it slows things down when they get other people to write things for them . . . you're taking two people to do the one job."

Some learners are a great deal younger; they've done "well enough at school, but I find myself surprised at the bits that they don't know when we come across some basic percentage work that you'd think they'd need in their role at work, or some basic words".

The former school counsellor believes many of his clients have been "let down in the school system".

"It's a systemic exclusion of people because of the style of education that we've chosen . . . that's why it fails so many people.

"Those of us who need to see things applied to make sense of them, struggle," he says. "Also big class sizes, if anyone gets left behind."

Unfortunately, plenty get left behind. They can read, they can write, but barely little else.

Young and most of his colleagues are not teachers but they work to pick up the pieces of their clients' confidence, using workbooks, daily plans and appropriate props. He works with groups of between four and 10 people in a series of workshops lasting a total of 40 hours.

"It's not sit down and let's do some maths, sit down and let's do some writing. We'd call it learner-centred, embedded literacy and numeracy.

"We might sit down with a topic like communication styles and it's framed up around teamwork and personal leadership, and people will do a questionnaire . . . so they are sitting and practising it, and then as they go through that they might come across tricky words, which they might not understand, and there are dictionaries on the table.

"At the end of that questionnaire they might have to do some maths to add it up, then I'll get them to divide it into percentages so it's easier to understand the data that way, and we'll have a chat about it and maybe present something of that back to the room."

A good result is a rise in confidence and a keenness for more learning.

Young believes the work gives something back to the country's bank balance, but also its well-being.

"Poor literacy hurts our productivity and I also think it's really bad for your emotional wellbeing, to not be able to participate fully in society."

It can have a dramatic impact on health too, according to Literacy Aotearoa chief executive Bronwyn Yates.

Literacy Aotearoa Literacy Aotearoa managing director Bronwyn Yates.

She cites a recent study in Britain, which looked at what happened when adult education was used at aged-care facilities.

"The incidence of incontinence dropped, the amount of medication people took dropped, the amount of depression that people experienced dropped," she says.

Canadian research also linked greater literacy and numeracy to improvements in health and wellbeing.

Literacy Aotearoa is represented in practically every centre around the country; 35 member providers and more than 500 tutors working with close to 8000 adult learners. About 60 per cent have no qualification, but a sizeable portion made it through school and are still struggling.

"If you come out of school with insufficient skills, and you come out of school not feeling sufficiently prepared to go into a job or further education, the question people need to ask is, is this right?

"For over a million New Zealanders . . . who fit into that area of not having sufficient literacy skills to cope with everyday tasks and demands, they went to school with the expectation [of success]."

There are many reasons why we are not meeting that, she says.

"It might be that they are not ready to learn when they come to school, might be that they have physical issues, it might be the way they are being taught is wrong for them . . . and the ability to be responsive to everybody's particular needs is limited by the resource that we provide them in schools."

More acceptance and support of the strugglers would help.

"You have people who don't want to be exposed as people who need to improve their literacy and numeracy.

"They're highly contributing, they're taxpayers, they're doing their bit in terms of growing healthy children, but they are more likely to experience less positive outcomes in a range of things."

Another major review won't help.

"We need one comprehensive strategy that addresses how we do the transition area in schools, to improve the numbers who are coming out with no qualifications."

It's not "rocket science", but it is powerful - "it spreads and they become champions of learning, they become champions of education, and life-long learners".