Yes, it's one of those niggles - the grey area (of which there is SO much!) between the 'accuracy' of a fantasy pseudo-medieval world loosely based on the look/feel of Westen Europe, the playability of the game/setting and the fun to be had with it.
The fun aspect loses out as soon as any of the other two have any input.
Accuracy and fantasy ("oh look, mum, a cat girl, it followed me home, can I keep her ...") have an uneasy mix at the best of times!
Playability would seem to the the needed core to gain some level of sanity ...
With a token nod to accuracy the percentage of literate people would be minimal - those who NEEDED to read/write, such as Mages, Clerics, etc. would be about the only ones. Reading and writing grant power and as a rule TPTB (The Powers That Be) are not prone to play nicely and share ...
Now, to look at the actual question - do you NEED to be able to read and write to work in a shop? That is an interesting question. I used to work with someone who used to work for PoLA (Port of London Authority) and there used to be a system of marking crates, etc., with coloured shapes (red square, blue circle) which were used to identify the destination for those unable to read. So, yes. SOME jobs would not require literacy. However, some will. The need to read labels, make records, etc., are such that for a lot of jobs the need to be literate exists.
There are too many disparate jobs out there, with too many of them with the need for literacy, for a simple one-off rule that allows anyone to have any job or for a 'job by job' evaluation to be done. Thus, a trifle sadly, we default to a lower, common level and state a simple, "to have a job in TLI requires literacy".
What happens when you want a job but cannot read or write? The answer to that is simple, maybe not to your liking, but simple - get a level and use the new skill point you gain to take Read/Write Common.
In the meantime, working as a Freelancer may not require literacy - knowing what a herb or animal of the forest is, nor how to prepare it needs literacy.