What does ‘Young Americans are far less “white” than older generation’ mean?

I stumbled on a phrase, Young Americans are far less white than older generation, in an article of today's New York Times titled In Census, Young Americans Increasingly Diverse.

I don’t think white refers to the color, of course. In a dictionary at hand, there is a definition of white as a slang meaning (1) fair and righteous, (2) credible, (3) generous, well-intentioned, (4) happy, well-off. Does the phrase today’s young Americans are far less white here implies they are far less well-off (or happy) than old generation? Is the word ‘White’ used in this notion very often? The text in question reads:

Demographers sifting through new population counts released on Thursday by the Census Bureau say the data bring a pattern into sharper focus: Young Americans are far less white than older generations, a shift that demographers say creates a culture gap with far-reaching political and social consequences.


Solution 1:

The dominant race/culture/population of Americans has historically been white (sometimes called Caucasian). It is one of the racial categories listed on the census form, which all Americans were supposed to fill out in 2010 (and every ten years). A census is used to count a population.

Because the article talks about demographers, whose profession is to count populations and parse them into various groups, and says these professionals are "sifting through new population counts" we may infer that they mean this is changing. Children of other races are in the ascendancy, especially children of mixed race.

It does not mean what the adjectives in the list you mention mean.

Solution 2:

In the context of that article, white refers to people whose "race" is identified as "White". Race is one of the things demographers and census-takers are interested in. The sentence "Young Americans are far less white than older generations" is somewhat odd at first sight, but it's explained later as being about the total number of White people, not that fixed individuals are turning less "white" for some meaning of white.

Mississippi, Virginia, New Jersey and Louisiana all had declines in their populations of white residents ages 18 and under, according to the bureau’s first detailed report on the 2010 Census. […] The number of whites under the age of 20 fell by 6 percent between 2000 and 2008[…]

Instead, growth has come from minorities, particularly Hispanics, as more Latino women enter their childbearing years. Blacks, Asians and Hispanics accounted for about 79 percent of the national population growth between 2000 and 2009, Mr. Johnson said.

The result has been a changed American landscape, with whites now a minority of the youth population in 10 states, […] In contrast, the number of mixed-race children doubled, Hispanic children doubled, and Asian children were up by more than two-thirds, according to Mr. Johnson.

“Living in the suburbs used to mean white family, two kids, a TV, a garage and a dog,” he said. “Now suburbia is a microcosm of America. It’s multiethnic and multiracial. It tells you where America is going.”

So you see that "Whites" is contrasted with Blacks, Asians and Hispanics, and terms like multiethnic and multiracial are used. This leaves no doubt about the meaning of the sentence.

See Wikipedia on white people and Caucasian race for more discussion on the definition.