One of the most persistent stereotypes about blacks concerns honesty and work ethic. These characteristics are also central to employers' evaluation of prospective and current workers; employers say that these traits matter more than skills. However, honesty and work ethic are difficult to observe and assess, placing them squarely in the terrain of statistical discrimination theory. One common criticism of this theory is that employers should be able to collect enough information on prospective workers to render race irrelevant, and that highquality workers have incentives to signal their productivity to employers regardless of race. As a result, inefficient stereotypes should erode over time. In contrast, I argue that there are many reasons for inefficient stereotypes about honesty and work ethic to persist, and I investigate the empirical evidence for these theories.