This study hypothesizes that Chinese, Japanese, and blacks in California earn less at each level of education and age than do whites, and that the situation is not improving. Hypothesized reasons include a lower return on education, exclusion from high earning occupations, nonadvancement within an occupation, and greater unemployment. A basic model containing experience, education, vocational training, disability, and location and acculturation variables is used to analyze annual earnings. More complex models add occupation and/or class of worker terms to the basic model. Statistical tests measure the reliability of the estimated effects of the explanatory variables. Major findings are that: (1) almost all men, age 21-65, are in the labor force so that unemployment is a negligible factor in annual earnings; (2) the effects of additional years of schooling are statistically reliable whereas the effect of a diploma is not; (3) Asian earnings are greatly decreased by apparent lack of American acculturation; (4) white earnings exceed minority earnings because of price, rather than mean differences in personal characteristics, attesting to the existence of racial discrimination; and (5) historical, psychological, and sociological insights are crucial to the economic study of social problems. (Author/JH)