Wages arent negotiated down. Layoffs happen and you see increase of unemployment.
Were you asleep the past 7 years?.
Wages don't have the tradition to be negociated down because we live in an inflation-induced world since 1914 (and before that, there wasn't much like collective wage negociation tradition). All our social and economic traditions are based upon an inflationary money.
If deflation were standard, it would be just as normal to have a negotiation downward of wages.
Stickyness of prices doesn't mean market doesnt control prices. It means the adjustment lag behind and explains why deflation can spiral.
Deflation can spiral just as much as inflation can spiral. They are duals.