Microchip Companies Create Child Care Programs to Win Federal Funds

This story was originally published by The 19th.

Last year, the Department of Commerce announced a historic first: Companies applying for a federal grant program had to provide a plan for offering child care to their workers. The grant money comes from the CHIPS and Science Act, which passed in 2022 and includes $50 billion to expand semiconductor manufacturing and research in the United States.

Also known as microchips, semiconductors are small wafers of circuitry used in computers and smartphones, as well as clean energy technologies like solar panels, wind turbines and electric cars. The United States is racing to develop its chip manufacturing capabilities in a bid to create jobs, reduce dependency on imports and prevent the supply chain issues that were laid bare during the COVID-19 pandemic.

But the government’s push to quickly build out semiconductor production can work only if there are enough people to fill those jobs. The semiconductor industry is projecting a shortage of around 90,000 workers, and the construction industry is already having trouble filling over 400,000 positions.

One way to do that is increase the number of women trained in these jobs. Around 4 percent of the construction workforce and 29 percent of the manufacturing workforce in the United States is made up of women. It’s why Department of Commerce Secretary Gina Raimondo has focused on addressing barriers they have historically faced in these industries — and the most obvious barrier is child care.

“This issue is not a social issue, it’s an economic issue and frankly, it’s a simple question of math,” Raimondo wrote in an emailed statement to The 19th. “If we are going to meet the national and economic security imperatives of the CHIPS for America Program, we are going to have to figure out how to fill the hundreds of thousands of jobs we are creating and we know that reliable and affordable child care is critical to getting more women into the workforce.”

A year later, the promise of child care is beginning to bear fruit. So far seven companies have been announced as grant winners, with five receiving over $150 million — which triggers the need for a child care plan. Each announcement has come with new details about how the companies will meet the child care requirement.

In April, the White House announced that Micron would receive $6.1 billion in funding and that it had already started building a new center that could accommodate 124 children directly across from the company’s Idaho headquarters and the site of a soon-to-be constructed fabrication facility. Micron also plans to build a new child care facility in New York as part of an expansion there.

“We recognize that there are systemic barriers to workforce entry and re-entry, including childcare services, which is why we are focused on providing childcare options that support and expand the workforce, and benefits the broader community,” Micron senior vice president April Arnzen said in a news release.

Intel, which was named a grant recipient in March for over $8 billion, already offers a discount at local child care centers and priority enrollment for employees and has committed to increasing discounted access to more providers. The company also plans to pilot a reimbursement program for hourly workers.

“As part of its commitment to fostering diversity and attracting top talent, Intel has doubled its primary and backup childcare programs, providing affordable, accessible, high-quality childcare for its workers across sites,” a company spokesperson told The 19th in an email. “We believe people should not have to choose between advancing their careers and managing the high cost of child care.”

Other companies, including Samsung, have provided fewer details in their funding announcements, stating that they are exploring options with the Department of Commerce as these contracts are finalized.

An official for the Department of Commerce told The 19th that while she expects companies to reveal more details in the coming months, this requirement is tricky for employers that don’t have an existing child care infrastructure to tap into. “Companies are actually quite willing to offer support for their employees when it comes to child care. … They are generally aware of it as a hindrance to maximum labor participation,” she said. But, she continued, “employers are kind of on their own.”

Child care advocates say that it’s important to get these initiatives right. Without thoughtful implementation, companies risk exacerbating the child care crisis. Some states plan to bring thousands of workers into communities that are already struggling to meet the needs of residents, where parents already have to wait months and even years for day cares.

“We are tentatively optimistic just because we see areas where things could be moving in the right direction,” Woods said. But, she continued, “a number of companies are really unsure about next steps because child care isn’t necessarily their number one priority.”

And child care is rarely a one-size-fits-all system, experts told the 19th. For some parents, having care at a job site is a convenient benefit, but for others it might make more sense to keep their kids at their current child care centers or to use a home-based provider. And different programs can be better fits for different kids, like for those with special needs or who don’t speak English as a first language.

But states can help employers meet these requirements in a way that is tailored to local communities. Oregon and New York, for example, are taking their own actions to address the impact manufacturing jobs will have on the child care crisis — and to position their states for CHIPS funding.

New York in 2022 passed the Green CHIPS Act, which provides tax incentives for companies to expand semiconductor manufacturing there. Like the federal law, it has a child care requirement. As a result, the state has been working with Micron to create child care options that meet the needs of the local community, in addition to Micron’s employees. It’s investing in a program that trains in-home care providers, as well as supplying a half-million dollars to the YMCA for expanding regional child care offerings. The company has also announced that it plans to partner with local child care centers to subsidize costs for employees who need an option outside of work-based care.

In Oregon, legislators took a different approach when they passed the CHIPS Child Care Fund in March. Companies that receive CHIPS money can contribute to the fund to fulfill their child care requirement, instead of having to come up with solutions themselves.Regan Gray, child care policy adviser with Family Forward Oregon, an advocacy group that helped work on the law, said it gives control to community partners who already know local child care needs best. It’s a way to say: “Let the child care experts take this, and you be the experts on building semiconductors,” she said.

Oregon’s fund does two things: It builds on an existing program that uses federal highway assistance funds to offer child care assistance for workers in trade apprenticeship programs, and extends the payments for up to five years after an apprenticeship. The funds can also be used to help child care providers expand their facilities, train staff, create additional slots and extend hours to meet the needs of construction workers who will be building semiconductor facilities.

Advocates are now planning to move forward on other legislation to expand the fund to meet the needs of parents who will be working in those fabrication plants.

This model solves a couple of problems, says Gray: It takes the burden off of employers, and it moves federal dollars into the public sphere, where they have a better chance of having a long-term effect on child care.

“The concern I have with giving the money to the semiconductor businesses to open up child care is: They’re not in the business of child care. They’re not in the business of sustaining this beyond their grant from the federal government,” she said. “This could be a huge loss of millions and millions of dollars, where we’re investing into these companies that in a couple years realize this is a real headache, rather than giving it to the child care providers that are in the business of doing child care.”

For experts like Gray, the elephant in the room is that the CHIPS fund is trying to compensate for failures at the federal level to pass comprehensive child care legislation.“How do we get more money into child care since Build Back Better didn’t pass?” Gray asks. For the Department of Commerce, she says, it was like: “Let’s stick it in here.”

For that reason, Gray wishes more states would follow Oregon’s lead in addressing the broader need for care. “I do feel like the intent of this requirement in CHIPS was to build out the child care marketplace, not to build out employer-sponsored child care,” Gray said.

But child care is not the only barrier that women face, either at the fabrication plants or in their construction, said Ariane Hegewisch, program director of employment and earnings at the Institute for Women’s Policy Research. “If you talk to tradeswomen [about these initiatives] there are kind of two reactions. One is that everybody thinks it’s great that there is this emphasis on child care.” But there are others who say child care is not the biggest problem women in the trades face, she continued: “They say yes, child care matters, but nondiscrimination matters, non-harassment matters, proper outreach matters.”

If companies solely focus on subsidizing child care or providing priority enrollment, their employees could be taking slots from the existing child care pool. “We’ve been pretty adamant that any sort of demand-side solution — so making child care more affordable for families — has to be partnered with a plan to build supply,” said Lea Woods, a senior policy associate at The Century Foundation, a left-of-center think tank that works on public policy issues like child care.

For that reason, the department also recently announced a voluntary “women in construction framework” that companies receiving these grants can commit to in order to achieve Raimondo’s goal of doubling the number of women in construction by the year 2030. The framework is basically a series of best practices that tradeswomen have said are needed to boost their workforce numbers, said Hegewisch.

It includes setting goals on CHIPS-funded projects to increase the number of women on site, building partnerships with community organizations that already work to recruit and train women, investing in career pathways for women in the trades, and making sure that workplaces are free of discrimination.

Hegewisch, who has been researching women in construction and workforce development for nearly two decades, said there is something exciting about the present moment. Other federal agencies, including the departments of Transportation and Energy, which have billions in funding to dole out for infrastructure and clean energy projects, are also finding ways to bring more women into the workforce. And the staff making it happen, she said, “are mostly women who really want to make a difference.”

But being able to hold companies accountable will be essential for progress. Hegewisch is feeling hopeful that another federal development could help: The Office of Federal Contract Compliance Programs plans to reinstate a requirement for construction companies to report employee demographic data each month. Federal contractors are supposed to ensure that women perform 6.9 percent of construction project hours for any given project — but without tracking it’s impossible to hold them accountable. Creating this rule is one way to give the government more oversight, she said.

“What is new now is there is so much money around,” said Hegewisch. “It’s public money and that money really comes with expectations.”

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