This paper illustrates how socioeconomic inequality changed along color lines during the 1970s and early 1980s, first by documenting changes in the relative and absolute well‐being of Black and Hispanic families, and second, by establishing a connection between declining family incomes and the labor market status of minority heads of households. Tabulations from the 1970 and 1980 Census of Population and the 1985 Current Population Survey show modest gains in median family incomes, declines in aggregate poverty rates, and a narrowing of economic differentials between immigrant and native families and between some minorities (notably Mexicans and Cubans) and non‐Hispanic Whites over the 15‐year period analyzed. However, greater disparities between Puerto Ricans and other minority groups, as well as non‐Hispanic Whites, were observed on virtually all economic indicators, signaling a deterioration in the economic position of this group. The concluding section discusses the persistence of color in shaping the...