The Future Of Driving May Be Electric Golf Carts

Tesla Motors' next vehicle will be an SUV, but the company may want to invest in something more like a golf cart.

An essay in the forthcoming May issue of Harvard Business Review upends the theory that the Palo Alto, California-based electric automaker has disrupted the car industry. Rather, golf-cart-like neighborhood electric vehicles, or NEVs, may represent the future of four-wheeled travel, it says.

An all-electric Polaris NEV.

Where Tesla's cars are expensive, going for upward of $100,000, NEVs sell for as little as $8,000. The auto industry proved to be resilient to disruption, as Tesla's competitors, including BMW, Mercedes-Benz and General Motors, have begun to aggressively compete with their electric cars. Whereas Tesla created a luxury vehicle that mimics the experience of a gas-fueled car, NEVs serve a different purpose altogether -- providing cheap local transportation. And as personal car ownership declines, NEVs appear to be a viable option for future pay-per-ride services that would rely on fleets of personal electric cars to shuttle passengers around cities.

That isn't to say Tesla doesn't play a crucial part in pushing the auto industry toward all-electric and self-driving vehicles. But as more people use ride-sharing services instead of buying cars, NEVs are positioned to dominate the auto industry.

"Personal transportation will be a combination of Uber and autonomous vehicles," Karl Brauer, senior analyst at the automotive research firm Kelley Blue Book, told The Huffington Post on Thursday. "Ultimately, small electric cars will be the primary form of transportation in urban areas."

Earlier this week, Morgan Stanley auto analyst Adam Jonas published a chart that outlined the future of driving. Though he provided no timeline for the evolution, he predicted that huge fleets of electric, autonomous vehicles will eventually become the norm, replacing the need for personal car ownership.

Essentially, whenever you need a ride, you'll summon a robotic vehicle -- much in the way people hail a Lyft or Uber driver through a phone app -- and it will transport you from place to place. It may even make other forms of public transportation, such as subways, obsolete.

NEVs are perfect for the job, Brauer said.

All arrows lead to quadrant four, where no one owns cars. They just summon them from a publicly or privately owned mega fleet.

It makes sense. As it is, the average person uses his car for only one hour a day, according to a still-widely cited 1995 statistic from the U.S. Department of Transportation. And driving by U.S. household fell nearly 10 percent between 2004 and 2014, marking the first major shift in car ownership since World War II.

"Whenever I need a car it'd be there for me and do what I need it to do, but when I didn't need it, it wouldn't cost me anything or take up any of my space. That sounds great," Brauer said. "And I'm a car guy."

Big carmakers have yet to start making NEVs. Polaris Industries, known for its all-terrain vehicles and snowmobiles, has emerged as a leading manufacturer.

Tesla declined to comment for this story.

For now, NEVs are largely limited to enclosed areas, such as college campuses or factories. Most cannot go faster than 35 miles per hour and are therefore barred from using many roads. But, with time, they may replace personal cars.

"It's not going to happen overnight," John O'Dell, senior editor at the car-shopping site Edmunds.com, told HuffPost. "But it will probably be a thing that happens, especially in urban areas."

Why Walking Meetings Can Be Better Than Sitting Meetings

Walking meetings are a kind of a big deal at LinkedIn. On any given day you can find workers strolling and talking together on the bike path at the company’s Mountain View, California, headquarters. The path takes about 20-25 minutes to circle -- perfect for a half-hour one-on-one with a colleague.

The walk and talks have obvious benefits. Desk-bound office workers can all use a bit more exercise. Sitting too much is killing us. Yet the walking meeting’s upsides go far beyond the physical. Walking helps break down formalities, relaxes inhibitions and fosters camaraderie between colleagues -- and less eye contact can fuel more personal conversation. Meeting on the go also minimizes distractions -- no phones, no email, no texts, no colleagues interrupting you.

Perhaps most intriguing, walking leads to more creative thinking, according to a recent study from researchers at Stanford University.

With sit-downs indoors, you face each other across a table. “You feel like you’re at the principal’s office,” Igor Perisic, LinkedIn’s vice president of engineering told The Huffington Post. “That’s not what you want.”

Perisic recounted a time when he and a colleague were trying to solve an issue with LinkedIn’s search function. They spent hours in a room with a white board trying to work it out. Still he felt that he was missing something.

“So we went out on a walk and talked about it,” Perisic said. When they got back indoors, they had the solution. “And it seemed like the obvious choice.”

You can find many big-shot fans of the walk and talk -- including Facebook chief Mark Zuckerberg, Twitter co-founder Jack Dorsey and this guy named Barack Obama. There’s even a TED Talk devoted solely to the topic.

Obama (left) is reportedly a big fan of the walking meeting.

We all intuitively understand that it's nice to get some fresh air outside, but new research shines a light on why walking could be especially good in a work environment.

When we walk we let our guard down, said Marily Oppezzo, who researched walking and creativity, along with her professor Daniel Schwartz, when she was a doctoral student at Stanford’s Graduate School of Education. Their paper was published online last year in the Journal of Experimental Psychology: Learning, Memory, and Cognition.

“Walking releases your filter,” said Oppezzo, now a post-doc at Stanford’s School of Medicine. Ideas you hold back in a conference room come spilling out when you’re moving.

To gauge walking’s effect on creativity, Schwartz and Oppezzo had test subjects walk and sit, and then asked them to find alternate uses for everyday items like tires or buttons. One person suggested using a button as a doorknob for a dollhouse, a tiny strainer, something to drop behind you to keep your path, for example.

They found that people who walked were able to come up with more unique ideas, both while they were walking and immediately afterward. And, it didn’t matter much if they walked on a treadmill or outside.

“Walking opens up the free flow of ideas,” they write in their paper.

This doesn’t mean you should convert all your conference rooms into gyms. Sometimes you’re going to need to sit down.

The Stanford researchers found that sitting is the better option when you have to solve a problem for which there is only one right answer. For example, they asked test subjects to come up with a single word that combines with the words “cottage, Swiss, and cake.” The sitters were better able to figure out the answer: cheese.

LinkedIn’s Perisic said that sometimes he needs to be near a whiteboard to work on a project. For difficult conversations -- say, letting someone know their performance isn’t measuring up -- he likes to talk in a more formal setting. “It’s tough to have the conversation outside.”

Mark Zuckerberg (left) and Jeff Weiner are both big fans of the walk and talk.

Still, Perisic, who oversees about 220 people, can often be found walking with someone on his team. And his CEO, Jeff Weiner, has been positively evangelical on the subject.

“It's energizing to get outside for a 30 minute walk a few times a day,” he said in a recent interview published on LinkedIn. “[It] just changes the whole state of things.”

Other Silicon Valley companies get the whole walking thing, too. Facebook just put in a half-mile loop on the roof of its new headquarters in Menlo Park, California, and workers there do a lot of walking meetings.

LinkedIn’s walking tradition was born more out of necessity than a careful review of research. During the firm’s early days, when it was growing quickly, it was really hard to book a conference room, Weiner told Bloomberg recently. “We had a lot of people and not enough space.”

A colleague suggested walking meetings as a fix -- solve the space issue and get some exercise. “It was very practical,” Weiner said.

The company's expanded since then, and it now has more space. But no one’s going back inside.

The Future Of Driving, In One Provocative Chart

In the future, only rich people will own cars and only robots will drive them.

That’s the takeaway from a new research note from Morgan Stanley auto analyst Adam Jonas. Like Tesla Motors CEO Elon Musk, he predicts that improvements in self-driving technology will eventually lead to bans on human driving on most roads.

Ride-hailing services such as Uber and Lyft, which have already been widely adopted in major urban centers, have paved the way for cities, and eventually suburbs, to adopt mega-fleets of public vehicles that will taxi passengers around. This will dramatically lower the cost per ride to about 25 cents per mile, which is roughly one-tenth of what a traditional taxi costs, Jonas said. He provides no clear timeline for when this might occur.

By contrast, wealthy people -- at least in the near-term -- will own self-driving vehicles, a fact on which Mercedes-Benz and Tesla seem to be banking.

Again, Jonas provides no clear timeline. But an increasing number of luxury carmakers are already adding autonomous features to their vehicles. In October, Tesla's Musk estimated that fully driverless cars will be on the road by 2023.

Here’s how the chart breaks down:

• Quadrant 1: Today, most drivers own or lease their own vehicles, which they drive themselves. Autonomous driving technology is only beginning to emerge.
• Quadrant 2: Over the past few years, ride-hailing services such as Uber, Lyft and Sidecar have alleviated the need to own a car in many major cities, making a driver much more accessible. Jonas said this is a logical step toward the so-called mega-fleets of public, autonomous cars.
• Quadrant 3: Over the next decade, rich people will likely swap out the cars they drive for cars that drive themselves. Already, Tesla is planning to roll out a version of its Model S sedan that has limited autopilot features sometime this summer. The latest version of the car, announced on Wednesday, starts at $67,500 after a Federal Tax Credit.
• Quadrant 4: This is the final evolution in the car industry and there is no clear date for when this will come to fruition. But with few exceptions, most people will be driven by cars that are either a public utility or part of a privately-owned fleet that users subscribe to use. At this point, laws will likely restrict human driving to select roads, Jonas wrote. Other forms of public transportation, such as subway systems, may become obsolete.

Reddit Hopes Ending Salary Negotiations Will Help Women

Ellen Pao is still fighting.

Just weeks after losing a courtroom battle that highlighted tech's glaring gender problems, Pao is trying to solve some of them closer to home: at Reddit, where she is interim CEO.

In an effort to promote gender diversity, Reddit is no longer negotiating salaries with potential hires, Pao told The Wall Street Journal. It was her first interview since losing a gender-discrimination lawsuit against the venture-capital firm Kleiner Perkins Caufield & Byers last month.

“Men negotiate harder than women do, and sometimes women get penalized when they do negotiate. So as part of our recruiting process we don’t negotiate with candidates,” Pao told the WSJ. “We come up with an offer that we think is fair. If you want more equity, we’ll let you swap a little bit of your cash salary for equity, but we aren’t going to reward people who are better negotiators with more compensation."

More broadly, Reddit is trying to build a team that values diversity, and it's working with diversity expert Freada Kapor Klein to find other ways to create an inclusive environment, Pao told the WSJ.

"We ask people what they think about diversity, and we did weed people out because of that,” she said.

Numerous studies suggest a disparity between men and women who haggle with employers about pay. Not only are men typically more likely to negotiate salaries than women, women are also penalized more than men when they do negotiate.

And when the conversation does turn to money, women are more likely to be judged for their social skills than for their competence, an issue that men rarely face.

Still, it remains to be seen how Pao’s mandate will work in practice.

“If you’ve got a talented female who has another offer from a competitor, are you really going to expect that they’ll take a big salary hit to come to your firm?” asked Malia Mason, a professor at Columbia Business School.

Pao sued Kleiner in 2012, alleging that it discriminated against her because of her gender and later retaliated by firing her. A jury voted in Kleiner's favor on March 27, after a four-week trial, which delved deeply into Pao’s personal life and ultimately focused on her performance at work.

But the lawsuit against Kleiner, which was an early investor in Amazon and Google, renewed scrutiny on the overwhelming gender disparity in tech. Few women hold leadership roles at tech companies, and reports of sexual harassment and misogynistic behavior have plagued Silicon Valley for years.

Pao said she got messages of support from other women throughout the trial. One group of women in the tech industry, led by Lori Hobson, took out a full-page ad in the Palo Alto Daily Post that read, “Thanks Ellen.”

“If I have helped to level the playing field for women and minorities in venture capital, then the battle was worth it,” Pao said after the trial.

Working Parents Should Be Very Happy About This Obscure Senate Vote

Something pretty remarkable happened late last month while the Senate was voting on the annual budget resolution. And it had very little to do with the budget.

On March 26, while individual senators were introducing amendments as part of a process known as “vote-a-rama,” Patty Murray (D-Wash.) offered up what she called a "paid sick day" proposal. Her idea is to guarantee that all Americans can take up to seven days off from work a year, with pay, in order to get better from an illness or to take care of a sick family member.

Labor unions and women’s groups love the idea. The business community pretty much detests it. That opposition helps explain why the idea has never gotten much traction in Congress, even though it's been kicked around for a long time.

Murray has taken up the leadership on the issue in the Senate, now that its previous champion, Tom Harkin (D-Iowa), has retired. But as Murray’s aides and allies tell it, the senator did not spend a lot of time trying to rally supporters or persuade wavering colleagues on this particular vote. She figured that most of her fellow Democrats would vote yes. She hoped that a handful of Republicans might do the same, so that she could claim majority support for the concept -- 51 votes, or maybe one or two more if she was really lucky.

She ended up with 61.

“We weren’t expecting to get the level of support we got," a Murray aide told The Huffington Post.

Vicki Shabo, vice president of the National Partnership for Women and Families, agreed. “There was not a big lobbying effort around this amendment,” she said. “The vote was a surprise -- but a very positive surprise.”

The breakdown of the vote was particularly interesting. In all, 14 Republicans voted to support the amendment. Conspicuous on the “ayes” list were Kelly Ayotte from New Hampshire, Mark Kirk from Illinois, Rob Portman from Ohio and several other incumbents up for reelection in states that have voted Democratic or have been up for grabs in the last two presidential elections. In fact, two such Republicans, Pat Toomey from Pennsylvania and Ron Johnson from Wisconsin, switched their votes at the last minute to join the majority.

One possible reason for the strong showing: Murray refused requests to consider the amendment on a voice vote only, according to sources familiar with what happened behind the scenes. Murray pushed for a roll call, which meant votes would be recorded -- and possible fodder in the 2016 elections. Any Republican who voted against the amendment would have to explain that vote to constituents.

This doesn’t mean paid sick leave is about to become law. The budget resolution isn’t binding legislation. It’s merely a set of instructions to congressional committees as they set out to write legislation. Amendments like Murray’s are typically vague and largely symbolic -- designed to demonstrate support for a particular idea, force adversaries to make unpopular votes, or some combination of the two.

After the vote, aides to some Republicans who voted for the bill assured reporters that their bosses were merely expressing support for the idea of paid sick leave, not any specific legislation that Murray and her allies had in mind.

But the prospect of voting against paid sick leave in the abstract obviously spooked a bunch of vulnerable Senate Republicans. That may say something about the level of political support, not just for paid sick days but also for what’s come to be known as the “working families” agenda -- an agenda that’s likely to figure prominently in the 2016 presidential campaign.

A Revolution In Family Life, Not Yet In Policy

The agenda is a reaction to a profound sociological shift in family life that’s been underway for decades.

In 1960, the majority of households with children had at least one parent at home, and the majority of women with children stayed out of the workforce. Today that’s no longer true, as more than 60 percent of households with children have no parents staying at home, and women make up nearly half the labor force. This has created new stresses and strains on families, particularly families with very young children.

These parents need time off from work, whether it's a few days to nurse a sick kid or a few months to care for a newborn. They need child care and, ideally, some kind of prekindergarten to prepare kids for school.

In pretty much every other developed country, government acts aggressively to meet these needs -- by subsidizing or directly providing early child care, for example, and by guaranteeing that parents can take time off, with pay, to care for newborns and sick relatives. That’s not the case here in the U.S., where the law requires very little, and such benefits are largely a function of whether employers offer them. That works out well enough for employees of large, generous corporations -- and not so well for everybody else.

Infographic by Alissa Scheller for The Huffington Post.

Predictably, the workers least likely to have such benefits tend to be in lower-paying industries, like fast food or retail, or those piecing together low-paying, part-time and contingent work. Paid sick days, the cause Murray is pushing, are a prime example of the kind of options these workers lack. Among people whose incomes place them into the highest quartile, 85 percent have paid sick days, according to the Economic Policy Institute. Among people in the lowest quartile, just 30 percent do.

And because responsibility for caregiving falls disproportionately to women, the inability to get paid days off or find affordable child care has forced them to make career choices -- like slowing their advancement or abandoning jobs altogether -- that reinforce gender inequality.

Efforts to bolster government programs and protections for working parents in this country have proceeded in fits and starts, thanks to a familiar set of obstacles. For one thing, initiatives typically require some combination of government regulation and spending. Those are tough to secure when either funds are scarce or Republicans, backed by corporate lobbies, have control over one branch of government -- conditions that have existed for most of the last few decades. It also hasn’t helped that, until very recently, large numbers of Americans were, at best, ambivalent about the role of women in the workplace.

The last time Congress passed a major piece of legislation with the sole purpose of helping workers balance work and family was in 1993, when the Democratic-controlled House and Senate passed the Family and Medical Leave Act, guaranteeing up to six weeks of leave for employees of large firms who needed time to care for a new baby or sick relative. It was historic legislation -- the very first bill that Bill Clinton signed as president.

Getting the law passed took a herculean political effort, spanning years, and the law has one big limitation: Because it requires companies to provide unpaid leave, not paid leave, many workers can’t afford to use it.

But political conditions change, and there are reasons to think the support for such policies may be stronger now. For one thing, the financial strain on families is greater, creating more demand for help. Child care costs may be the most vivid example. According to the Census Bureau, a working mother in 1985 could expect to pay, on average, $87 a week for child care. By 2011, that working mother could expect to pay $148 a week -- an increase of 70 percent. (Those numbers are adjusted for inflation.)

And relative to the 1980s, advocates for policies like paid leave and child care support are more likely to find lawmakers -- including men -- who understand firsthand the kind of pressure working parents face. That’s true of state legislatures and Congress and that’s true of the White House, where President Barack Obama has spoken frequently about the challenges he and Michelle faced when their kids were young and both of them had promising professional careers ahead of them.

One more factor that could help: Experts are compiling more evidence about the effect that programs like paid leave can have on businesses and the economy. Critics have long maintained that such policies would hurt employers and ultimately slow economic growth. The latest evidence suggests otherwise -- in part because such policies can improve retention and allow women, who increasingly have high skills, to stay in the workforce if they wish.

Success In The States, Struggles In Washington

Advocates for more generous child care and leave policies have already made some gains at the state and local level. Paid sick leave was on the ballot in four places last year -- three cities and one state, Massachusetts. It passed in all four. The process is taking longer at the federal level, but it's clearly underway. The White House has made work-family issues a major priority for Obama’s second term -- by issuing reports on the productivity lost when women can’t pursue career aspirations; by staging summits and other White House events on the needs of working families; and by proposing or endorsing major initiatives for universal prekindergarten, paid leave and tax credits to help parents with children.

On Capitol Hill, work-family issues have been a longtime cause for such veteran Democrats as House Minority Leader Nancy Pelosi and Rep. Rosa DeLauro from Connecticut. But particularly in the Senate, up-and-coming Democrats are staking their own claim to the agenda. Kirstin Gillibrand (D-N.Y.) has been waging a crusade on behalf of paid leave, and Bob Casey (D-Penn.) recently proposed a major new tax credit for families paying for child care.

“You don’t want to blow things out of proportion,” said Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth. “But I’ve been in D.C. since 2000 working on these issues, and it’s feeling avalanche-y. There’s a lot going on.”

The Democrats sponsoring these pieces of legislation are optimistic about the prospects for passing legislation, even with Republicans in charge of both houses of Congress. And maybe those statements aren’t quite as naive as they sound. After Obama unveiled his own version of a child care tax credit, Speaker John Boehner and Senate Majority Leader Mitch McConnell identified it as the one idea on the president’s agenda they could support.

But with Congress struggling to pass even routine legislation, and dollars for new programs in short supply, it will probably take the 2016 campaign to focus attention on these issues -- and, eventually, rally constituencies for passing laws.

Hillary Clinton, the Democrats’ likely nominee, seems poised to make this case. She has a long history of advocating for these sorts of programs, going back to the 1970s and her work with the Children’s Defense Fund. And while her demurral about paid family leave in a CNN interview last summer got lots of attention, advocates say they aren’t worried and expect a strong work-family agenda to be part of her campaign.

The big unknown is how Republicans will react -- and this is why, ultimately, the Murray vote may be more significant than the garden-variety budget measure. If the Murray vote proved anything, it’s that Republicans can read the same polls as Democrats. In a 2013 HuffPost/YouGov poll, 74 percent of respondents said they would support a requirement that all employers offer paid sick leave. Republicans recognize that voters crave stronger, more generous supports for working parents, or at least like the sound of them.

Of course, opposition to these measures remains strong. As Dave Weigel of Bloomberg pointed out, every Senate Republican also running for president voted no on Murray's amendment.

If the political pressure gets intense, the GOP could simply offer up a different agenda -- one that sounds similar to what Democrats are proposing, but actually accomplishes less. An example would be the “Working Family Flexibility Act,” which is a Republican proposal for making paid sick leave more widely available. The initiative would require that employees build up overtime hours in order to get paid leave -- and then give employers discretion over when employees can take it.

Some labor advocates consider the Republican proposal nothing more than an attempt to undermine guarantees of overtime pay, on which many low- and medium-income families rely.

Could such proposals be the basis for future compromise, if not in this Congress than in a subsequent one? Are they simply an attempt to deflect criticism from voters who want action on work-family issues? It’s difficult to know. But it’s unlikely Republicans can simply avoid these issues altogether. Democrats have taken notice of the success that Murray had. They’ll be back for more.

Dave Jamieson contributed reporting.

March's Weak Jobs Report Is More Evidence The Fed Should Be Careful

The March jobs report, released today by the Bureau of Labor Statistics, was not good. After months of very strong jobs reports, though, it was a specific kind of not good: not outright negative, and nowhere near apocalyptic, just confusingly bad.

As unclear as this month's jobs report was in terms of telling an obvious story about the U.S. economy, when it comes to raising interest rates, it will suit the Federal Reserve just fine. At its last meeting, the Fed tied its decisions on interest rates more closely to economic data, and yet also indicated it would be loathe to raise rates too early and snuff out economic growth. This jobs report lets it be true to both commitments.

The U.S. economy added 126,00 jobs in March, far less than the 247,000 economists, on average, had expected. What's worse, January and February job numbers were revised down by a total of 69,000, making this report even weaker. The unemployment rate was unchanged at 5.5 percent.

In the first few months of 2015, job growth seems to have slowed down from a breakneck pace in 2014. The job market has grown by a very solid 261,000 new jobs per month over the past six months, the New York Times' Neil Irwin noted. But, as Slate's Jordan Weissmann retorted, in the past three month's we've averaged just 197,000 new jobs per month.

It's still too early to say what these numbers are telling us. Has the U.S. job market finally turned the corner and left the disfigurement of the recession behind? Or is it still scarred and somewhat limping? It could be either.

Wages are also sending mixed signals. Wage growth has been remarkably and depressingly steady at a pace of about 2 percent per year for five years. It stayed remarkably and depressingly steady in March, rising 2.1 percent from a year ago.

But if you look at the past three months, annualized wage growth is an impressive 4 percent, the Peterson Institute's Justin Wolfers pointed out. And other indicators, like employer compensation costs and the number of companies that say they plan to give raises, seem to indicate wage growth is finally picking up.

So, amid all this "on the one hand, on the other hand" data, what is the Federal Reserve supposed to think about the health of the economy -- let alone the wisdom of raising interest rates, as it is widely expected to do at some point in the near future?

As University of Oregon professor Tim Duy pointed out in his excellent analysis of the Fed's most recent meeting, by removing the word "patient" from its description of how it thinks about interest-rate hikes, the Fed is saying it will let data dictate its decision. And the data from the jobs market, even before this bad jobs report, Duy noted, was saying "don't raise rates" anytime soon.

In other words, Duy says that Fed Chair Janet Yellen "[moved] the Fed both closer to and further from the first rate hike of this cycle." That's not as inscrutable as it sounds: The Fed's "closer" to the data, which could potentially improve quickly, and "further" because the data, as it is now, says don't raise rates.

And the March jobs report reinforces that stance: a data-dependent rate hike is still a ways off.

Why Corporate America Is Finally Raising Wages

Some of the country’s biggest employers are finally raising wages amid mounting pressure from protesters and a hardier job market.

McDonald’s on Wednesday became the latest major company to give workers -- albeit a fraction of its total workforce -- a pay bump that will lift average hourly pay to $9.90 from $9.01. The move, which will go into effect on July 1, follows a similar change made in February by Walmart, the nation’s largest private employer.

What, after years of stagnant wage growth for low-paid workers, is causing corporations to shell out more to their staff?

For some companies, the pay raise has been compelled by a sense of ethical leadership.

Aetna Chairman and CEO Mark Bertolini raised the minimum wage at the health insurance company to $16 per hour after reading French economist Thomas Piketty’s bestseller Capital In The Twenty-First Century, which warns of the increasingly wide gap between rich and poor.

Other firms have been motivated by the desire to maintain market share.

“We’ve known for a really long time that if you look like a good corporate citizen, that’s good for sales,” Bob Keener, spokesman for the nonprofit Business for a Fair Minimum Wage, told The Huffington Post. “If you make a big public announcement about how you’re going to raise wages, you look like a good corporate citizen, and that’s going to increase your sales.”

Competition is also driving wages up. Call it a wage-hike domino effect. As the U.S. economy continues to add jobs, even retailers who claim to keep prices low in part by minimizing payroll expenses must increase how much they pay their workers to avoid losing them.

Since apparel giant Gap Inc. raised its minimum wage to $9 per hour last year, the company has seen a major influx in applicants, The Washington Post reported.

“When other large, low-wage employers boost their wages, McDonald’s has to be concerned about its employees moving to another employer where they can get another buck per hour,” said Christine Owens, executive director of the nonprofit National Employment Law Project. “There is undoubtedly some tightening in the labor market at the low end that is having an effect on wages.”

Plus, higher wages are good for business. Sales at McDonald’s and Walmart have languished over the past year, and boosting wages could actually be part of a strategy to help turn things around.

For every extra $1 a company spends each month in payroll, it could get back anywhere from $4 to $28 in monthly sales, according to a 2007 study by professors at the Massachusetts Institute of Technology, the University of Pennsylvania’s Wharton School and elsewhere.

Companies are also facing intense pressure from protesters to pay a living wage. Workers united under such groups as the "Fight for 15," which advocates for a $15 minimum wage, have led rallies in cities across the world, including a major gathering outside McDonald’s headquarters in Oak Brook, Illinois, last May. Fight for 15 is also planning a series of strikes for later this month.

Protests for higher pay are gaining steam. This week, Seattle began the process of raising its minimum wage to $15 per hour. Los Angeles is considering bumping the minimum wage for the city’s hotel workers to $15.37 -- making it the highest in the country.

While both McDonald’s and Walmart aim for a $10 average wage by next year, that is still $5 below the wage that protesters are demanding. Critics worry that these incremental pay boosts could be an attempt to undercut a movement that is gaining serious clout.

“This is a PR and a political move meant to knock the wind out of this growing and increasingly militant movement,” Peter Dreier, a professor of urban policy at Occidental College, told HuffPost. “The companies are now competing with each other not to look like they’re the worst employer in the world.”