Half of all employees who were laid off and found new jobs in recent years are earning smaller paychecks in their new positions.

According to a new Bureau of Labor Statistics survey, 5.3 million workers were laid off from jobs they'd held for at least three years between January 2001 and December 2003. Salaries for re-employed workers fell by 16% to $572 a week in their new jobs from $681 in their previous jobs. The decline in pay is the largest since the period between 1991 and 1993, when pay decreased by the same percentage.

Professionals were not immune to the income hit. While 70% of the 800,000 professionals who were laid off between 2001 and 2003 had found new jobs by January 2004, when BLS conducted its survey, only half reported securing salaries equal to or better than what they'd previously earned. On average, salaries for professionals fell by about 14% to $815 from $943 a week.

Managers felt an even greater blow in the pocketbook. Those displaced from management, business and financial operations jobs saw their income slip by 17.4% to $833 a week from $1,008. Workers employed in sales and sales-related occupations saw their paychecks shrink the most, suffering a 30% decline in average weekly earnings to $558 from $796.

When the BLS last conducted the survey in 2002, just a third of re-employed professionals were earning less in their new positions.

"It's not surprising to see that earnings losses are somewhat more severe during this survey period due to the fact that labor-market conditions have been sluggish over the past three years," says Steve Hipple, an economist at the BLS.

With the weak job market placing employers squarely in the drivers' seat, candidates must have the confidence to negotiate a salary offer to not lose economic ground when rebounding from a job loss.

"Most out-of-work professionals are basically afraid that they'll lose a job opportunity if they try to negotiate pay," says lawyer Lee Miller, author of "Get More Money On Your Next Job: 25 Proven Strategies For Getting More Money, Better Benefits and Greater Job Security" (McGraw-Hill, 1998). "Employers can sense that and as a result, the candidate doesn't get the best offer."

To strengthen your negotiating position, continue aggressively seeking other job opportunities, he advises. "The biggest mistake people make when in serious discussions with an employer is to stop looking for other positions. You'll be able to negotiate with more confidence if you're talking to another employer because you'll know you have other options."