This article examines significant demographic trends that illustrate the advances of many black Americans from 1954 to 1984. We also examine trends which indicate deterioration in the socioeconomic circumstances and life chances of a significant portion of the black population. The two competing trends in the status of black Americans (at one extreme an emerging black elite, at the other a growing black underclass) have been central in provocative debates about economics and race over the past decade. This article locates the debate in historical context, summarizing the work of early theorists on this issue. The article then uses US Census data to document changes from 1950- 1980 in occupational distribution, labor force participation, educational attainment, income and earnings, fertility and mortality rates, and family organizational patterns for black and whites. Using the political economy perspective, we argue that race and economic status are inexorably linked in this society. Shifts in the society's economic base coupled with historical (and contemporary) patterns of racial oppression explain the disproportionate concentration of blacks in the underclass. Sociologists are challenged to analyze the nexus of race and economics in America using early theoretical models and rigorous modern methodologies.