I recently have been told my boss that I can either accept a demotion and is 6 dollars an hour less or accept a severance pay of one months pay.legal?

Unless you have an employment agreement which limits your employer's right to fire or demote you, or you believe that you are being demoted based on some reason prohibited by statute (e.g. race, religion, gender, etc.), your employer can fire you at any time for any reason.  It is under no obligation to offer you another position, demotion or not, or severance pay.  So, yes, unless there are other relevant circumstances you didn't mention, it is legal.