Recession. Terrorism. Layoffs. What wage earner or job seeker in this economy wouldn't want a return to "Morning in America"? Remember that? The year was 1984, and Ronald Reagan was running for reelection under that slogan, declaring that the long night of Carter-era economic stagnation had ended. Americans agreed so overwhelmingly that Reagan won majorities in 49 states. Yet the very month of Reagan's landslide, the unemployment rate stood at a painful 7.2 percent.

Or how about "The Downsizing of America"? That was the title of a much-discussed collection of New York Times articles that, beginning in March 1996, poignantly depicted the lot of workers displaced in a supposedly "jobless" recovery. This 51,000-word series inspired a blizzard of copycat stories and fostered a gloom not unlike the one that hangs over the job market today. Yet the downsizing that outraged the Times was limited almost entirely to a statistically insignificant, if highly visible, population of white, middle-age managers -- many of them working in corporations, like AT&T (T) and IBM (IBM), headquartered in the newspaper's prime circulation area. Today the vast majority of Americans fondly -- and accurately -- remember the mid-1990s as one of the most prosperous periods in our history.

These examples illustrate how easy it is to lose perspective on the job market, particularly one in as much flux as today's. Judging from the press, today's salary and employment outlook stands somewhere between dismal and disastrous. But Business 2.0's first annual employment survey tells a different story. We examined wages and job security in almost 100 professions, with particular emphasis on five industries that played central roles in the 1990s boom: software, hardware, media, telecom, and health care. Except in the most stricken fields, like telecom, salaries have held up surprisingly well.

Nationwide, most workers who held on to their jobs have actually seen steady raises since the bubble burst, and their odds of staying employed are higher now than in the aftermath of previous recessions. Yes, the unemployment rate reached 6 percent last spring and has hovered at that level ever since. Yes, that is 2 percentage points higher than at the height of the 1990s boom. But it's still far lower than the rate during the Reagan recovery. "There was a time when we'd be going, 'Wow, unemployment is only 6 percent!'" says Patricia Anderson, a Dartmouth economics professor. If the country were in the same mood today as in 1984, President George W. Bush might well regard "Morning in America" as too downbeat to describe a brilliant, sun-drenched moment in which unemployment is near historic lows, home prices are moving up smartly, cars are selling in record numbers, interest rates are the lowest in 35 years, and inflation is negligible.

But, of course, Americans don't feel remotely the way they did in that optimistic moment 19 years ago. So long as a battered stock market, fear of war and terrorism, and distrust of corporate ethics darken the national psyche, the president will do what he has to do in such times: propose a stimulus package.

So how should you think about this job market? First the bad news. Since January 2001, U.S. companies have laid off 3.3 million people. That's more than were let go in the previous five years combined and nearly quadruple the number cut loose during the early 1990s recession. Last year construction employment declined by 1.3 percent, transportation and public utilities jobs shrank by 2.8 percent, and manufacturing employment slipped by 3.5 percent. The pain was particularly intense in Silicon Valley, where 127,000 jobs have disappeared and the average salary has dropped 22 percent -- from $79,800 at its 2000 peak to $62,500 in 2002. That takes the average tech worker's paycheck close to 1998 levels.

On top of that, an important safety valve is missing: In contrast to previous downturns, there is no region of the country where the economy is really cooking. If you were a laid-off autoworker from Detroit in 1979, you could load up the station wagon and move to Texas or Georgia and build a new life. Similarly, Californians who suffered in the defense industry recession of the early 1990s could escape economic misery by moving to Washington or Colorado. Today a few places, like Fayetteville, Ark., and Missoula, Mont., are doing better than the rest of the country. But there's no region in America where anything like a boom is going on -- indeed, no region in the world.

Nonetheless, today's labor market remains a few horsemen short of the Apocalypse. The jobs that were lost last year in technology, construction, manufacturing, and so on were almost entirely offset by gains in other sectors. Services employment went up 1.5 percent, and finance, insurance, and real estate increased almost 1 percent. Overall, total nonfarm employment slipped just 0.16 percent during the year. And odds are, that's as low as it will go. Since the end of the recession in 2001, the economy has grown at a respectable 2.8 percent. Growth faltered in the fourth quarter of 2002, but that annualized pace should be enough to bring the joblessness rate down again.

Some of the flakier dotcom jobs are never coming back, of course, but the fear that great numbers of tech and other white-collar jobs have been permanently transferred offshore is probably hysterical. "As a cyclical phenomenon, jobs moving offshore isn't that important," says Robert Shimer, an associate professor of economics at Princeton. The concern, says Kevin Hoover, an economist at the University of California at Davis, is based on the misapprehension that if our wages are high and other people's are low, all our jobs will be exported. "It turns out we are more efficient than the people we are competing with," he adds.

Meanwhile, there's another stubborn fact that receives scant attention: The prices of stocks, airline tickets, computers, and much else have tumbled since the bubble burst, but outside of a few rough spots like Silicon Valley, the price of labor has risen. Indeed, the average salary jumped 3.7 percent in 2002, about the same rate as in the prosperous 1990s.

Sure, faced with a court order from a bankruptcy judge, United Airlines machinists recently took a 14 percent pay cut, but such givebacks are rare. The consensus among economists is that wages will rise 4 percent this year, despite a soft economy and huge increases in the cost of employer-provided health care. That average may well be achieved by handing out a sheaf of 1 percent raises and reserving 5 percent and above for a few star performers, but very few workers will see their wages cut.

How can this be? Again, history is a useful guide, and it shows that even during the steepest recessions, the majority of workers don't lose their jobs; instead, they get raises. Yes, even during the Great Depression, prices fell much faster than wages, so many workers actually saw an increase in their real income. From August 1929 to March 1932, factory workers still on the job saw their real income jump by an annualized rate of 4.3 percent, which was two and a half times the rate of increase they enjoyed during the Roaring '20s.

Economists have differing opinions about this "wage stickiness" and whether it's a good thing. The Keynesian types generally think employers shouldn't cut pay during a recession, because doing so would just further shrink consumer demand. Neoclassical economists passionately argue that if labor were "repriced," like everything else during a downturn, to reflect the new balance between supply and demand, the labor market would clear and there would be no unemployment. But neither branch can explain why -- even in unregulated, nonunionized markets -- this repricing almost never happens.

About the only way to find out is to ask employers. To most economists, this is a totally bizarre suggestion, but fortunately at least one of their number has stepped out of the ivory tower long enough to make a few inquiries. Beginning with the 1990 recession, Truman F. Bewley, a professor of economics at Yale and a former editor of the Journal of Mathematical Economics, spent eight years interviewing businesspeople, labor leaders, unemployment counselors, and consultants. His resulting 1999 book, Why Wages Don't Fall During a Recession, poses the blindingly obvious question: Why do employers prefer to lay off workers rather than reduce their wages?

The answer, as Bewley learned, is also blindingly obvious, when you think about it. Employers believe that cutting wages will cost them more money than they'll save, because it will drive key employees into the arms of higher-paying competitors and leave the employer with resentful second-stringers. Layoffs at least get the disgruntled employees off company property.

If wages were to go down during a recession, there would probably be less unemployment, and therefore less personal bankruptcy, less crime, less divorce, less child abuse, less suicide. But there would also be more misery in the workplace. And rational or not, that's a trade-off most employers aren't willing to make.

So cheer up. If you still have a job, it's probably more secure than it was a year ago. And as you locate the average salary for your job category in our employment outlook, be sure to check under the heading "Projected 2003 Raise." You may be in for a pleasant surprise.