Should you take a lower-level job?

No, IT candidates cannot afford to make this mistake.

Recruiters all over the country at citing "hard economic times" as the reason for quoting lower rates or salaries, yet ...if you speak to one of their competitors, you might find that the agency or headhunter firm is taking a larger cut.

Along with this, there have been many articles, etc. "framing" jobseekers in this market as "undesirables" or outcasts ...completely ignoring the fact that corporate budgets have been cut-back on contracts, hence releasing (not "firing" which suggests that the person was an FTE or did not satisfy job requirements), their contractors to reduce costs.

In Minnesota, for instance, the board of unemployment has taken the position that a contractor should be hired or extended by a firm (unless something is wrong with the person's work). If the contractor does not find another job with the same agency or firm, Minnesota Unemployment indicates that the contractor "Quit" the position or company. Contractors are required to receive a form from the paying company to indicate that no further work was available. [A statement of no expectation of follow-on work is written into most W-2, 1099, and C2C contracts as a disclaimer.]

This position is contrary to the reality of contract or consulting work, especially if the contractor has taken steps to create and LLC or S-Corp and in being paid as a business.

Likewise, if a backward move is taken ...after this position is over (which would be certain to re-acquire competitive salary and address expenses and rent/mortgages which were based on higher pay), the recruiters and agencies then justify lower rates and salary offers based on the previous pay, regardless of economic circumstances.

The cycle is vicious and predictable ...jobseekers have to use defensive tactics because employers (like those who require privacy data through agencies before submission), then use inability to find candidates at below market rates as justification for hiring H1-B, etc.

The topic in regards to the labour system is basically a systematical organization of behavioral needs.
Most employees do take a cut in pay. The beginning process after the hiration is the probationary period. Secondly, it is the appraisals; which determine if the wage is going to increase.
Employees are encouraged not only, to be courteous, problem solvers, data reseachers, and team players,whom can exchange roles during routine and non routine job duties.
Overall the question: does your personal work values meet the needs of the IT's organization's mission statement? Can you serve his or her public democratically, knowledgeably and ethically during a pay cut?