Your point about going beyond the phonics debate is important. One of the best things that I have been a part of is disciplined collaboration. Although the intent was to improve aspects of literacy, the prime focus was to work collaboratively to identify strategies for the context at hand. I sometimes feel that those who jump to THE solution, whichever it maybe, are unwilling to allocate the time and resources to build the capacity of those in the classroom.
In regards to your closing question:
Are literacy levels actually dropping or is what being literate looks like changing in our modern, digital world?
I am reminded of something that Clive Thompson said in Smarter Than You Think:
Before the Internet came along, most people rarely wrote anything at all for pleasure or intellectual satisfaction after graduating from high school or college. This is something that’s particularly hard to grasp for professionals whose jobs require incessant writing, like academics, journalists, lawyers, or marketers. For them, the act of writing and hashing out your ideas seems commonplace. But until the late 1990s, this simply wasn’t true of the average nonliterary person. The one exception was the white-collar workplace, where jobs in the twentieth century increasingly required more memo and report writing. But personal expression outside the workplace—in the curious genres and epic volume we now see routinely online—was exceedingly rare. For the average person there were few vehicles for publication.
What about the glorious age of letter writing? The reality doesn’t match our fond nostalgia for it. Research suggests that even in the United Kingdom’s peak letter-writing years—the late nineteenth century, before the telephone became common—the average citizen received barely one letter every two weeks, and that’s even if we generously include a lot of distinctly unliterary business missives of the “hey, you owe us money” type. (Even the ultraliterate elites weren’t pouring out epistles. They received on average two letters per week.) In the United States, the writing of letters greatly expanded after 1845, when the postal service began slashing its rates on personal letters and an increasingly mobile population needed to communicate across distances. Cheap mail was a powerful new mode of expression—though as with online writing, it was unevenly distributed, with probably only a minority of the public taking part fully, including some city dwellers who’d write and receive mail every day. But taken in aggregate, the amount of writing was remarkably small by today’s standards. As the historian David Henkin notes in The Postal Age , the per capita volume of letters in the United States in 1860 was only 5.15 per year. “That was a huge change at the time—it was important,” Henkin tells me. “But today it’s the exceptional person who doesn’t write five messages a day. I think a hundred years from now scholars will be swimming in a bewildering excess of life writing.”