A literature search revealed various definitions of literacy and various theories about how basic skills relate to occupational skills. For example, literacy was said to be defined within the context of a society and was often measured in society, rather than in isolation. Alarms were sounded about the many people in the United States who lack basic skills; many of these people are members of minority groups. Some studies found that effective cognitive development was placing learning objectives within a real world environment; i.e., literacy must be defined in context. Competencies were found to be both basic and specific to various occupational fields. Restructuring of adult vocational education and workplace literacy programs demands the establishment of a national system of world-class occupational skill standards. Based on the literature search, a study was conducted to determine the correlation between literacy and basic skills and workplace occupational skills. The population for the study included 30 employees in various fields working for a variety of employers large and small. The study population was administered a modified version of the Self-Directed Search and the Tests of Adult Basic Education. The survey found that those persons displaying high occupational skills also had high basic and literacy skill levels and were more likely to be engaged in technical or professional types of occupations. Therefore, the study concluded that there is a correlation between basic and literacy skills and occupational skills. The results of the study suggest that the workplace demands an increased level of basic skills, and the amount of education and skill clusters workers have affects their occupation, performance, and pay. (Contains 21 references.) (KC)