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What jobs are currently paying 85k?
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You should always negotiate pay, so long as you’re reasonable about it. The idea that you’re paid less for hybrid working conditions is bizarre - you’re being paid for your contribution, not for where you work. If the company is going to use the hybrid working environment to stick to their offer, that’s a red flag for me (simply because they’re not bright enough to simply say “this is as high as we can go”).
Given this job market, be thankful you've got an offer.
I don't see any reason not to negotiate pay, regardless of the working arrangement. Hybrid is a great perk, but it doesn't make up for a terrible salary. Wait until they officially make the offer to determine how hard you want to press during negotiations. As long as you're tactful about it, they shouldn't rescind.
Mentor
I would try to negotiate both - it can’t hurt to ask!
Bowl Leader
Wouldn’t hurt to negotiate. Worst they can say is no.