Conditions of illiteracy and functional illiteracy frustrate the intent of laws like the Comprehensive Employment and Training Act (CETA) that provide job training and employment opportunities for the economically disadvantaged, unemployed, or underemployed. The Adult Education Act of 1978 should provide the basic educational skills needed by CETA applicants, but the federal funding for adult education has been inadequate. With respect to funding problems for prevocational programs, the state of New York has begun awarding state appropriations by giving preference to proposals that link basic literacy and language instruction with CETA, adult vocational education, and high school diploma/equivalency programs. With the recent federal budget cuts, what is needed is a recognition that most employment in this society demands at least an eighth grade reading level and that training and employment services will be cost effective only if the recipient is literate or receives some literacy training. (HTH)