Data from the Current Population Survey of 1971 are used in this paper to investigate the ways in which various population groups utilize their earnings capacity. The hypotheses tested in this paper are: (1) that groups are poor primarily because they fail to utilize their earnings potential effectively; and (2) that the high incidence of poverty among blacks is attributable to their failure to take advantage of earnings opportunities. Comparisons are made between earnings capacity and rates of capacity utilization for individuals and family units along the dimensions of marital status, sex and race. Findings indicate that the relationship between utilization and potential earnings is greater for nonmarried individuals than for married units, greater for married males than for married females, and that differences in utilization and potential earnings between blacks and whites along all dimensions is relatively small. It is concluded that low utilization of earnings potential plays a minor role in explaining the poverty problem and that racial differences in earnings cannot be attributed to racial differences in capacity utilization. (Author/EB)