US president Joe Biden’s war chest of subsidies for chip manufacturers comes with strings attached. Those seeking funds will have to offer employees a specific perk: provide affordable, high-quality childcare.
Last August, the Biden administration made $52.7 billion worth of funds available as part of the CHIPS and Science Act to further American semiconductor research, development, manufacturing, and workforce development—$39 billion of which is earmarked for direct manufacturing incentives. Today (Feb. 28), the commerce department is set to announce that semiconductor manufacturers vying a minimum $150 million in subsidies will have to submit a plan for how they’ll provide low-cost, high-quality childcare for their workers, Reuters reported.
Companies will be able to use some of the government money to meet the new child care requirement, including for “building company child-care centers near construction sites or new plants, paying local child-care providers to add capacity at an affordable cost for workers, [and] directly subsidizing workers’ care costs or other,” among other things, according to the New York Times.
Quotable: Childcare is crucial to grow the labor force
“Here’s the truth: CHIPS won’t be successful unless we expand the labor force. We can’t do that without affordable child care. That’s why we’re requiring companies that receive funding to tell us how they plan to provide affordable child care for workers.” —Department of Commerce secretary Gina Raimondo in a tweet dated Feb. 27.
Apple MacBook Air Laptop
The M1 chip delivers 3.5x faster performance than the previous generation all while using way less power. Get up to 18 hours of battery life.
Affordable childcare could get more women to join the workforce
As White House press secretary Karine Jean-Pierre noted during a Feb. 27 briefing, workers, the need for childcare to boost our workforce is “undeniable,” especially for women.
Since women tend to take on a disproportionate share of unpaid caregiving, more affordable and reliable childcare would give them the opportunity to seek paying jobs and advance their careers.
The pandemic hit women the hardest. With school-from-home, millions of women—who performed three times more childcare in 2020 than men, according to one study—were compelled to leave the workforce to take care of their kids.
The case for making chips manufacturers provide childcare, by the digits
$200 billion: A funding plan the Biden administration pitched back in April 2021 for universal preschool and other childcare programs as a means to boost economic growth by paying child and home health care workers better, and freeing up unpaid caregivers to go to paying jobs. The White House has not been able to drum up enough support for this policy, so it’s trying to further it by tying it to other things—like the semiconductor subsidy
11 million: Children who had a potential need for child care in 2019—before the pandemic—but only 8 million slots were available, according to a survey of 35 states by the Bipartisan Policy Center in Washington
16,000: Childcare facilities in the US that shut down between December 2019 and March 2021
95%: Level of childcare jobs in February 2023 versus pre-pandemic days. They haven’t recovered entirely, according to an analysis of Labor Department data by the Center for the Study of Childcare Employment at the University of California-Berkeley
3 times: Need for slots in child care facilities versus actual care capacity in the Syracuse area, where Micron announced a $100 billion chip making investment last year
18%: Child care costs as a share of a typical construction or manufacturing worker’s salary in Phoenix, where Taiwan Semiconductor Manufacturing Company (TSMC) has committed $40 billion to build two plants
3 in 10: US manufacturing workers who are women. “We need chip manufacturers, construction companies and unions to work with us toward the national goal of hiring and training another million women in construction over the next decade to meet the demand not just in chips, but other industries and infrastructure projects as well,” Raimondo said in her Feb. 23 speech at Georgetown University’s School of Foreign Service
88%: Share of mothers with children ranging from newborn to age five said that they’d be more likely to work for an employer offering benefits including some combination of paid childcare, flexibility in working from home for at least part of the workweek, or set schedules allowing them to plan childcare, according to a 2022 study by nonprofit Marshall Plan for Moms
More than $10,000: the average annual cost of childcare
Charted: Just over one in 10 manufacturing workers receive any form of childcare benefits
👶 The US still has a pandemic-level child care problem
💰 Closing the gender pay gap has stalled. A new study reveals why