The movement of middle-class residents, especially blacks, out of inner-city neighborhoods has been hypothesized to contribute to the decay of the inner city and the growth of an underclass by increasing social isolation and depriving youth of role models. This study examines changes in patterns of racial and class segregation in the residential structure of Milwaukee (Wisconsin) between 1970 and 1980 and their effect on poor, black children living in the inner city. Statistical data from the 1970 and the 1980 censuses were analyzed using segregation indexes and measures, after adjusting for data suppressed by the Census Bureau for reasons of confidentiality. The following summary conclusions are discussed: (1) racial residential segregation clearly decreased, especially for high status blacks; (2) blacks displayed higher levels of intragroup class segregation than whites in 1970; (3) black intragroup class segregation increased more than white intragroup class segregation; (4) changes in the class isolation of poor black children were due to changes in the aggregate population rather than to changes in class segregation patterns; and (5) racial residential segregation is the predominant influence on patterns of class isolation. A discussion of the suppression of data in the census tape files, a list of 34 references, and 9 tables of statistical data are appended. (FMW)