A study focused on the effect of welfare reform legislation on literacy or social service providers and families participating in the programs. Program staff and participants in Wisconsin and California were surveyed and interviewed to determine how welfare reform impacted what they do programmatically or personally. Findings indicated receipt of public assistance has had an enormous impact on the ways in which these family units are viewed or treated in American society, with media, legislative body, and public opinion being used to castigate them for being in need of assistance. In states like Wisconsin, programs and counties took the position that no one could receive public assistance and developed a program of services that allows the social welfare office to give them medical and food subsistence, assistance finding work, and help maintaining a job; but they cannot just receive assistance. In California, programs were tailored to focus on short-term training leading to work with required performance of community work or service to continue receiving public assistance. These two compelling factors were uncovered: the rhetoric about those on welfare and how they abuse or misuse funds has led to development of programs that penalize, not aid, families in poverty; and there are conflicting goals between the educational and training realities of those receiving welfare and those engaged in service implementation. (Contains 21 references.) (YLB)