This volume is part of a series that is designed to promote stronger ties between the educational resources in the Northeast and Midwest and the economic development process. The discussion identifies steps that businesses, education communities, and public policymakers can take to define literacy standards and raise basic competency levels in reading, writing, and mathematics. It argues that programs to improve literacy can also increase employment and productivity in the economy. The first chapter looks at the dimensions of the literacy problem in the United States, including the particular case of dislocated workers. Chapter 2 describes some responses of employers to illiteracy. Recommendations are made for actions by company officials. Chapter 3 groups actions that schools and public agencies can take in two categories: improve the assessment capacity and increase the flexibility of educational institutions. Recommendations are listed. Chapter 4 discusses state and federal responses to the problem. A bibliography is appended. (YLB)