Prior research has well documented，and debated，the relative importance of such factors as human capital，political capital，and region，in the earnings determination in reform-era urban China. In this paper，we argue that a main agent of social stratification in contemporary China continues to be danwei，the work unit. Using data from a 1999 survey we conducted in three large Chinese cities，Wuhan，Shanghai，and Xi’an，we assess the extent to which workers’earnings（including regular wages，bonuses，and subsidies）depend on their danwei’s profitability. We find danwei to be one of the most important determinants of earnings in today’s urban China. Workers who are employed in highly profitable danwei earn as much as 2.5 times those who are otherwise comparable but employed in unprofitable danwei. Further，we do not find the importance of danwei profitability to differ by city or by employment sector.