A “white collar” worker is a professional or educated worker, or someone who works in an office. A “blue collar” worker is someone of the working class, such as a tradesperson. The term “white-collar job” has been cited in print since at least 1910. The origin of “white collar” probably derives from the white-collared dress shirts that many of these workers wore at that time.
 
The term “blue collar” (job or worker) has been cited in print since at least 1924.
   
 
Wikipedia: White-collar worker
The term white-collar worker refers to a salaried professional or an educated worker who performs semi-professional office, administrative, and sales coordination tasks, as opposed to a blue-collar worker, whose job requires manual labor. “White-collar work” is an informal term, defined in contrast to “blue-collar work”.
   
History
Origin of the term
The term “white collar” was first used by Upton Sinclair, an American writer, in relation to modern clerical, administrative and management workers during the 1930s. Sinclair’s usage is related to the fact that during most of the nineteenth and twentieth centuries, male office workers in European and American countries almost always had to wear white, collared dress shirts.
 
Demographics
Formerly a minority in the agrarian and early industrial societies, white-collar workers have become a majority in industrialized countries. Industrial and occupational change during the twentieth century created disproportionately more desk jobs, and reduced the number of employees doing manual work in factories.
 
In recent times workers have had varying degrees of latitude about their choice of dress. Dress codes can range from relaxed — with employees allowed to wear jeans and street clothes — up to traditional office attire. Many companies today operate in a business-casual environment where employees are required to wear dress pants (business trousers) or skirts and a shirt with a collar. Because of this, not all of what would be called white-collar workers in fact wear the traditional white shirt and tie.
 
As an example of workspace contrast, the higher-ranking executives may have large corner offices with impressive views and expensive furnishings, whereas the lesser-ranked desk clerks may share small, windowless cubicles with plain utilitarian furniture. As an example of the differing responsibilities, the higher-ranked worker will usually have a more broad and fundamental responsibility in the company whereas the subordinates will be delegated more specific, and limited tasks. The cases of differing privilege and salary speak for themselves.
 
At some companies, the “white-collar employees” also on occasion perform “blue-collar” tasks (or vice versa), and even change their clothing to perform the distinctive roles (i.e., dressing up or dressing down as the case requires). This is common in the food-service industry. An example would be a restaurant manager who may wear more formal clothing than lower-ranked employees, yet still sometimes assist with cooking food or taking customers’ orders. Employees of event-catering companies often wear formal clothing when serving food.
 
As salaried employees, white-collar workers are sometimes members of white-collar labor unions and they can resort to strike action to settle grievances with their employers when collective bargaining fails. This is far more the case in Europe than in the United States, where less than ten percent of all private sector employees are union members. White-collar workers have a reputation for being skeptical or opposed to unions, and tend to see their advancement in work as tied to their reaching corporate goals rather than in union membership.
 
C. Wright Mills, an American sociologist, conducted a major research study of the white-collar workers which was reported in his book, White Collar: The American Middle Classes (1951). He claimed that alienation among the white-collar workers was high because they were not only selling their time but also had to sell their personality with a “smile on their faces”, referring to insurance-sales people like his own father.
   
wiseGEEK
What is a White Collar Job?
Although dress codes have changed significantly over the years, many jobs are still defined by the traditional work shirts worn by those who perform them. Workers who primarily perform manual labor or other hands-on work often wear blue work shirts, for example. Jobs traditionally held by women, such as teaching or secretarial work, are considered to be pink collar jobs. A white collar job is typically associated with clerical, sales or managerial occupations. The traditional dress code for such work is often a white button-down dress shirt and tie.
 
Back in the days when the American economy was primarily agrarian, white collar jobs accounted for less than 20% of the total workforce. Today, the number of people who hold a white collar job is closer to 60%. As technology improves in a given industry, there is often a shift from blue collar workers who service the machinery to white collar workers who supervise and manage production. A white collar job is quite often associated with management, even if the employee’s actual job duties are more hands-on than supervisory.
   
Merriam-Webster’s Online Dictionary
Main Entry: white–col·lar
Pronunciation: \ˈhwīt-ˈkä-lər, ˈwīt-\
Function: adjective
Date: 1920
: of, relating to, or constituting the class of salaried employees whose duties do not call for the wearing of work clothes or protective clothing — compare blue-collar
 
(Oxford English Dictionary)
white-collar, n. and a.
orig. U.S.
A. n. 
a. (As two words.) A white collar regarded as characteristic of a man engaged in non-manual work.
1919 U. SINCLAIR Brass Check xiii. 78 It is a fact with which every union workingman is familiar, that his most bitter despisers are the petty underlings of the business world, the poor office-clerks..who, because they are allowed to wear a white collar.., regard themselves as members of the capitalist class.
b. A person engaged in non-manual work.
1930 A. P. HERBERT Water Gipsies iv. 39 That family over there..come here every Thursday of their lives for a little family reunion, and white collars, too, all of them.
1938 W. SMITTER F.O.B. Detroit 32 It wasn’t long before the white-collars up front began taking notice of what was going on on the floor.
   
B. adj. 
a. Of a person: engaged in non-manual, esp. clerical, work.
1921 Ladies’ Home Jrnl. May 98/4 Urban chain restaurants have accustomed white-collar boys and girls to tasty viands, albeit in limited amounts.
1924 W. MCDOUGALL Ethics & Some Mod. World Probl. iv. 125 The strata of brain-workers made up the white-collar class or middle classes.
1937 Atlantic Monthly Dec. 750/1 Proletarian literature..has been accompanied by books on the white-collar worker, the storekeeper..the scientist, and the millionnaire in situations equally disastrous or degrading.
1948 Chicago Tribune 3 Apr. II. 1/4 The modern white collar girl wants a job which not only offers opportunities but advances as well.
b. Of work or an occupation: not manual or industrial; spec. clerical.
1926 Amer. Speech II. 96/2 The uneducated and uneducable found a new field opening to them, and rushed in, to take advantage of the ‘white-collar’ work.
1937 ‘G. ORWELL’ Road to Wigan Pier xi. 205 The typical Socialist..is either a youthful snob-Bolshevik..or, still more typically, a prim little man with a white-collar job.
 
Chronicling America
15 July 1910, Norfolk (NE) Weekly News-Journal, “The Homesteading Game,” pg. 6, col. 4:
He is independent—because he had the good sense to leave a cheap, white-collar job, deny himself fleeting luxuries, take up the cross, and follow—the plow.
 
Chronicling America
8 December 1911, Leavenworth (WA) Echo, pg. 3, col. 2:
Bankers Want More Farmers
At a recent meeting of the Washington State Bankers’ Association, it was the general impression that our educational system is not preparing boys and girls for the things that they are fitted for. As most of the training seems to be for “white collar jobs,” the bankers decided they must do something to make farm life more attractive.
   
12 June 1913, Waterloo (IA) Evening Courier, pg. 10, col. 2:
The jobs are known as “white collar jobs” to the old railroad men because both the engineer and fireman can wear white collars and keep clean.
   
Chronicling America
11 October 1913, Boston (MA) Evening Transcript, pg. 2, col. 4:
...the vastly better condition of the man in jumpers than that of the man in the white collar job.
 
Chronicling America
7 April 1914, Boston (MA) Evening Transcript, pg. 10, col. 3:
...fewer men are wanted for the white collar jobs than for the monkey-wrench jobs and by the law of supply and demand there is prospect of better pay for larger numbers in the skilled trades than in the clerkships. 
       
Google Books
March 1916, Manual Training and Vocational Education, vol. XVII, no. 7, “Private Trade Schools in Chicago,” pg. 499:
The school can not be considered strictly industrial as it prepares for “white collar jobs.”
 
30 October 1917, Sheboygan (WI) Press, pg. 2, cols. 3-4:
For the “white collar workers”—the army of clerks, stenographers, bookkeepers, secretaries and minor executives of the big Bridgeport plants—the housing company erected a thoroughly modern apartment house with 39 apartments of three rooms and bath each, fully equipped and renting from $25 to $30 each.
 
Chronicling America
8 March 1918, Mahoning Dispatch (Canfield, Mahoning County, OH), “White Badge,” pg. 4, col. 4:
Ever since Mr. Snoggles moved in from the country he has rejoiced in the privilege of wearing that badge of gentility, a white collar. It was not that he failed to realize that the money is no longer in the white collar job, but in the greasy overalls job.
 
3 May 1920, Helena (MT) Independent, pg. 4, col. 6:
Win these two islands back to the sweet crop, and even a “white collar worker” is able to afford sugar on his oatmeal once more.—Chicago Journal.
 
23 May 1920, New York (NY) Times, “The Short Way Home,” pg. E2:
Paradoxical as seems the case of WILLIAM BAUER, it is characteristic of the predicament into which the world of labor has fallen. BAUER was a “white collar” worker, struggling to support a family on $21 a week.
(...)
In asserting their “right to happiness” they held up the commerce of the nation, inflicting a gigantic loss upon business and adding materially to the expense of the community—including, of course, the “white collar” worker.
 
Chronicling America
25 August 1920, Evening Missourian (Columbia, MO), pg. 1, col. 5:
OFFICE WORKERS ARE UNEASY
Summer Brings Blue Envelope to Many.
By United Press
CHICAGO, Ill., Aug, 25—Office workers and clerical men are feeling the pinch of the summer depression in business, according to F. M. Smith, attending the convention of the National Association of Technical, Educational and Commercial Employment Agencies which opened here today.
 
“White collar workers have not the grasp on their jobs they had six months ago; office managers are wielding the axe unsparingly, and shirkers and incompetents especially are being weeded out,” he declared.