I don't think it's a respect thing... I've been friends with my boss for years (well before he gave me a job). A lot of other people in the company are close friends with him. It wasn't something he wanted to do. He even cut his own pay, and both his son's.
I've got a meeting with him on Monday to talk about it. I suggested to him that I could work from home. That will cut his expenses (office space, power, internet etc.) and my travel/parking expenses.
If I was working from home then that would make up for the money lost from the pay cut.
I honestly don't think he'll agree to it, but if he does then I'll be very happy. That would allow extra flexibility to help me work on my music career and take my car off the road if need be.