After being in a comfortable, well-paid job for a while, a lot of people lose their ability to survive on the streets. But in today's economy, more and more people in high-level positions are being summoned to their boss's office and being told the words, "You're fired." This is particularly true in the foreign banking sector here in Tokyo, where perhaps as many as 3-5,000 have already or will soon lose their jobs.
With so many highly skilled bilinguals and managers flooding the market at the same time, competition for the few jobs in the marketplace is severe. There are indeed jobs, but many of them are for smaller, less prestigious companies and they pay 30 to 50% less. I am seeing a lot of people recently who know the market situation but are in a state of denial about reducing their expectations. For some, it's almost as if they think resetting their job status is an irretrievable step backwards.
Dealing with rejection is never easy, and many turn to religion or personal philosophy to deal with setbacks in life. In my case, although I'm not particularly religious, I do believe that the "human condition" is one where we are continually being tested by the world around us. Even in the worst of times, we have choices and are able to influence our futures.
Taking a job with a less prestigious company and probably a pay cut may not be fun, but it isn't the end of the world. Take a risk, because if you're as good as you think you are, your new employer might just start rewarding you with pay increases, new senior positions, or even partnerships. Just be sure, though, that whatever job you take at a smaller company has a better title than the one you had. Then, if at a later date you head back to a more prestigious firm, and they ask about a sudden income drop, you can say, "Because of the recession, I decided to go out and grow my [management] skills - so I picked a suitable company to start with."
The message is clear and simple: even in tough times, the important thing is to stay in the race, keep adding to your skill set (even on a lower salary), and keep current on the state of the job market for new opportunities. Certainly, I think that taking on a "lower level job" is all about attitude. If you're a survivor, if you believe that you're a person who can be successful, then look at any new job as an investment in your future. If the company that is lucky enough to get you is smart, it'll realize the value you're contributing and soon start looking after you.
I wouldn't preach this message of (a little bit of) self-sacrifice without believing in it myself. Years ago, I was competing for a computer engineering job against a much more qualified person. I knew that I had to do something to get the job, so I told the company's HR Manager that I would accept a starting wage of 25% less, so long as he agreed to review my salary every 6 months and judge my performance. I got in, worked like hell for that company - pulling 6-day weeks and a lot of overtime - and within 3 years was the highest paid non-managerial employee in the company. The strategy worked, and I was a better person for it.