Washington, Feb. 28 (BNA): The U.S. Department of Commerce said it plans to require companies seeking at least $150 million in funding from the $52 billion Semiconductor Act to submit a plan for how they can provide affordable childcare for their workers.
The Biden administration has unsuccessfully sought $200 billion to fund comprehensive pre-kindergarten and other child care programs in an effort to boost economic growth by paying better wages for child and home health care workers, and freeing up unpaid caregivers to go to jobs. Paid, Reuters reported.
Commerce cited data that the lack of affordable and accessible child care “is one of the biggest constraints keeping Americans — especially women” — out of the work force in arguing that companies that receive chip financing must show how they will provide affordable child care.
The childcare component shows the Biden administration’s willingness to direct federal funds — in this case, earmarked under the CHIPS and Science Act — toward companies that agree to advance its policy goals.
Nobel laureate Joseph Stiglitz said on Twitter that the lack of childcare is a major barrier to participation in the workforce. “The scarcity of workers is a huge challenge in our economy, particularly in high-tech industries. Having companies that receive CHIPS money provide child care to workers is an important component.”
On Tuesday, the Department of Commerce will launch its first funding opportunity. Congress appropriated $39 billion for manufacturing incentives to encourage companies to build and expand facilities, and the act also created an investment tax credit of 25% to build chip factories worth an estimated $24 billion.
On Tuesday, the department will outline what other factors it will consider when making awards. The law prohibits applicants from using government funds for dividends or stock buybacks.
The New York Times reported Monday that the companies will be required to share a portion of any “windfall profits” with the federal government.
Last week, Commerce Secretary Gina Raimondo said the financing would create hundreds of thousands of good jobs.
“But here’s the truth: If we don’t invest in America’s manufacturing workforce, it doesn’t matter how much we spend. We’re not going to succeed,” Raimondo said. “We need to be honest with ourselves and creative in finding solutions if we are going to meet this workforce challenge.”
Commerce said the chip company’s awards last year “will not be larger than is necessary to ensure the project takes place here in the United States” and will discourage “race-to-the-trough subsidies competition between states and localities.”