There are more than 4 million small businesses across the country that provide more than half of private sector employment, generate 47 percent of the gross national product, and generate two out of every three new jobs in the United States. Because small businesses provide the majority of new workers with their first work experience, they are at the front line in teaching work socialization. Only 19 percent of firms with fewer than 100 employees provide some basic skills instruction to their employees. Education that is provided to small business employees tends to be more informal and unstructured than in large companies. Formal training in small businesses generally occurs off-site. The greatest barrier to any kind of small business education is the problem of costs. With demographic changes, the choices for small business are to cut profits, to cut wages in exchange for benefits, or to increase productivity and let that pay for the higher cost of doing business. But to increase productivity, a more highly skilled work force will be required. An example of a consortium for providing training to employees of small businesses is the Finger Lakes Regional Education Center for Economic Development in New York. A basic skills program is being offered by Hampden Paper in Holyoke, Massachusetts, to its 185 employees. Problems faced by workplace literacy programs include the need for functional context and the lack of information about what kinds of skills are needed for specific entry-level jobs. (CML)