This article deals with processes of marginalization and patterns of segregation in contemporary Sweden, which have transformed the former welfare state towards increased segregation and inequality between different social groups. Two ethnographic studies on young men living in stigmatized metropolitan areas are used in discussion and analysis. During the 1990s we could see the birth and growth of new forms of poverty in multi-ethnic suburbs of the metropolitan districts of Sweden. During the last two decades, youth subcultures oriented towards Reggae and Hip hop have grown and attracted many young people in these metropolitan areas. This article focuses on how two youth collectives in two metropolitan areas developed different strategies to cope with discrimination, second class citizenship and territorial stigmatization. In both these collectives it is possible so see how informal learning processes, embedded in cultural praxis of the youth groups and empowered by a connection to African-American music cultures, enable these groups and individuals to express themselves. The youth collective in one suburbs articulates a social and political criticism that could be compared to the cultural aspirations of the labour movement in the early part of the last century. The youth from the other neighbourhood have a strong fascination with criminal out-law culture and do not articulate themselves in the same way as members of the other group. Still their cultural expressions must be understood as ways to deal with their positions as marginalized, immigrant youth.