This paper provides a unified explanation for why blacks commit more crime, are located in poorer neighborhoods and receive lower wages than whites. If everybody believes that blacks are more criminal than whites – even if there is no basis for this – then blacks are offered lower wages and, as a result, locate further away from jobs. Distant residence increases even more the black-white wage gap because of more tiredness and higher commuting costs. Blacks have thus a lower opportunity cost of committing crime and become indeed more criminal than whites. Therefore beliefs are self-fulfilling.