Business leaders condemned the English education system for failing to teach children the 3Rs.
About half of employers are unhappy with the poor literacy, numeracy and communication skills among school leavers, according to figures from the CBI.
As nearly 600,000 teenagers await their GCSE results this week, CBI director general Sir Digby Jones accused Ministers of failing to deliver on their promises to improve English and maths in schools.
"A working knowledge of English and maths provides a vital foundation for the modern world of work," he said.
"But the education system is failing many young people by leaving them ill-equipped.
"How can school leavers hope to succeed in the modern world if they cannot read or write?
"The CBI welcomed the Government's pledge of a ' relentless drive' to raise standards and eradicate illiteracy and innumeracy but there has been no clear action to back up the promises of February's Education White Paper.
"We need to see action as well as words."
The CBI said barely half of GCSE students achieve a grade C or better in maths (54 per cent) and just six out of ten (60 per cent) reach the same standard in English.
A survey of employers found that 42 per cent were unhappy with the basic skill levels of school-leavers. And 50 per cent said teenagers do not have the required skills in communication, teamworking and problem-solving.
A spokesman for the Department for Education and Skills said the Government was "determined" to make sure no pupils left school without basic skills.