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1.) A new word to avoid any of the old ones, a politically correct term with no negative connotations. I think it is going out of fashion in that sense, it is mostly used in academia now, where it is very important to be neutral, it used to be more common in the public media. Or at least that's what I see.
2.) A phrase to designate all non-whites together, useful in that sense, particularly in "multi-cultural" situations, which are much more common than they once were. California, where I live, is around 50% "persons of color" now, and that means people from all over the world, asians, africans, latinos, middle eastern, you name it, and of course us European immigrants, we got them. And it that situation, it is a useful word, though it is more common here to consider the different ethnic divisions independently, and to consider ethnicity rather than "race" or skin color, which is superficial and means little. People intermix so freely here that superficial distinctions become meaningless.
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