BALTIMORE -- You see it everywhere, at bus stops, on park benches, on bumper stickers, on city trucks: a silhouetted figure poised over an open book next to the motto "Baltimore, the City that Reads."

Not exactly a glitzy slogan, Baltimore Mayor Kurt L. Schmoke acknowledges. But in a city of 720,100 where up to 200,000 adults are functionally illiterate, he says, "it shows where our priorities are."

On second thought, Schmoke says, literacy is more than a priority. It's a matter of survival.

Yet, of the 200,000 illiterates, only about 3,700 are enrolled in literacy programs at any given moment, according to city estimates.

Absenteeism runs high. And 70 to 90 percent of participants are welfare recipients, mostly women, a kind of captive group that must enroll in education or job training programs to maintain welfare eligibility.

Baltimore, like many older "smokestack" cities with a fading industrial base, is moving rapidly to a service economy -- banking, insurance, tourism, health care -- where the need for greater literacy and technological savvy grows daily.

"We need to adjust to the economic realities of the future," says Schmoke, 40, one of the new generation of young black professionals who have become mayors of major U.S. cities. "That's why these {literacy} programs are so vital."

"At the receiving dock, it used to be the guy would just unload the truck," Westinghouse executive Charles Zimmerman says. "Now he has to enter the information into a computer.

"Unless we improve the literacy levels of the people coming into the work force," says Zimmerman, a board member of Baltimore Reads, a private support group of the city's literacy campaign, " . . . these people don't have a prayer."

Behind the barrage of slogans, "readathons," car wash fund-raisers and other promotional gimmicks since Schmoke became mayor in 1987, he has established a new Cabinet-level literacy office and assigned it the Herculean task of teaching legions of people not only to read but to cope with high-tech America.

The numbers are daunting. About one-third of the city's population above age 16 is functionally illiterate, that is, unable to read at a ninth-grade level. While that standard may seem high, officials say many have difficulty performing common tasks like reading bus schedules or filling out job applications. Uncounted thousands cannot read at all.

Many of the people in literacy programs come from neighborhoods wracked with crime, drugs, teenage pregnancy, unemployment and poverty, problems that hinder attendance, officials say.

Of 5,409 enrolled in programs during the year ending June 30, up to 40 percent dropped out at one point or another. Almost 37 percent were unemployed. Fourteen percent were nonreaders.

"They're prisoners in their own neighborhoods," says Maggi Gaines, the city's literacy boss. "They can't read bus and street signs. They can't read medicine bottles."

"I never worked a job in my life," says Annette Shellington, 30, a mother of three who completed the eighth grade at age 17 but until recently read at second-grade level. "I never filled out a job application. I was scared . . . . I was embarrassed." Enrolled in a city program, she now reads at fourth-grade level.

Even with Schmoke's efforts, the number of enrollees has increased little since 1987.

"In short-term measurements, there has been no significant improvement," Schmoke said in an interview, "but we're certainly moving in the right direction . . . . The impact will be felt in the community in the next few years."

Efforts by Schmoke and Gaines nevertheless are praised by state education officials, who monitor local literacy programs, especially for their "networking" among different and sometimes competing literacy programs and their successful wooing of private financial support.

In addition to giving the program Cabinet-level status, the mayor also "has been a very visible presence himself . . . coming to graduations, things like that," says Patricia Bennett, section chief for adult education in the state Department of Education. "That's very much a morale builder . . . . It makes a difference to the individual student."

To fulfill a 1987 inauguration promise, Schmoke established the Baltimore City Literacy Corporation, a quasi-public agency run by Gaines, whose annual budget has soared in three years from $125,000 to nearly $1 million with a combination of public and private funds.

It acts as coordinating agency, funneling students and money into the dozen or so literacy programs, ranging from community college classes to tiny storefront enterprises, that existed before the corporation was created.

It has also created two projects of its own. One is the Ripken Learning Center, which recently opened with a $250,000 donation by Baltimore Orioles shortstop Cal Ripken Jr.

Across town, the corporation's other project, the Learning Place Northwest, has about 90 students. They undergo formal class training and tap out exercises on computers, learning everything from parts of speech to how to read nutrition labels on a can of spaghetti.

Many, says Learning Place director Rosalind Wilson, are high school dropouts in their twenties and thirties who want to get a general equivalency diploma (GED) as a stepping stone to better employment.

"They're learning that literacy is empowerment," Wilson said.

"Everyone has their eye on those three letters: 'GED,' " said Paul Harris, director of the Ripken Center.

But for many, it is a long haul. "If they completed the seventh or ninth grade years ago," said Harris, "they've lost a lot of that stuff . . . A guy may be able to read aloud through a paragraph, but he can't pick out the main thought. He can't analyze it . . . This is critical thinking, instead of rote regurgitation."

"We're sort of making up for lost time," said Sister Charmaine Krohe, a nun at St. Ambrose Outreach Center, a satellite of the Learning Place Northwest. Until a recent funding cutback, she headed a one-on-one tutoring service there for functionally illiterate students.

There are some success stories, like Annette Shellington. She entered St. Ambrose last February reading at second-grade level. Since then, says Sister Charmaine, she has advanced to fourth-grade level.

"I read, and {the tutor} teaches me how to break the words down," Shellington said in an interview. " . . . I look up the words in a dictionary."

She grew up in a home without books, but now, Shellington said, "I read 'Snow White and the Seven Dwarfs' to my daughter . . . I read a newspaper now and then and look at the want ads."

Gaines acknowledges the city's programs are plagued by high absentee and dropout rates. But new motivational sessions designed to promote students' sense of "self-esteem and dignity" appear to be improving attendance, she said.

"We are picking up the pieces of a troubled public school system" that has allowed functionally illiterate students to pass from grade to grade, she said. "I would like to think that as our remedial efforts increase, the school system will {improve} also."