Racism has prevented people who comprise the working class from becoming conscious of their identity, in opposition to interests of the capitalist class which exploits them. Racism, in both its material and ideological aspects, has provided privileges at the cost of continuing a system that limits human development, maintains insecurity, and largely leaves the working class powerless. The United States, in particular, has a racially and sexually stratified working class that reinforces class divisions. The white male working class is at the top of the hierarchy, although wage increases and full employment are no longer secure even for this class. Educational opportunities for working class youth at every age level are being constricted, and social services are being reduced. Racial and sexual divisions of the working class and the consequent lack of working class consciousness and culture severely weaken the ability to respond to attacks on working class living standards. The development of racism during the development of capitalism is reviewed, with attention paid to the roles of slavery and imperialism. The institutionalization of racism in the early 20th century and its implications for different races are examined.