Feb 27, 2023 - Economy

Chip makers must provide child care plan for fund access

Illustration of a wooden bead and wire child's play set with a dollar sign created from the twisting wire

Illustration: Natalie Peeples/Axios

Chip makers who want access to billions of dollars in new federal funding will first have to figure out how workers will access affordable child care, per a new requirement from the Commerce Department.

Why it matters: Parents, particularly women, can't go to work if they can't find child care — a problem that's only grown more acute, first in the pandemic and now in the tight labor market.

Driving the news: The move is a clear acknowledgement from the administration that child care issues are intertwined with the economy and employment.

  • It's also a way for the administration to make progress on expanding child care access after its efforts to pass any nationwide policy fell short.
  • The multi-billion dollar CHIPS bill was signed into law last year as a way to bolster the domestic production of semiconductors — a vital component for almost every electronic device we use today — and to help prevent future supply chain crises.

How it works: Companies who want to tap a slice of the $39 billion in funding set aside to build chip manufacturing plants will be required to submit a plan explaining how facility workers, as well as construction workers, will access child care, according to a presentation from the Commerce Department shared with Axios.

  • The agency is agnostic on how companies get this done. They could build company-run onsite facilities, or outsource to a vendor. Companies could sponsor care directly or provide vouchers, discounts or cash.
  • They'd need to understand what kind of care is actually available in the region, amid a nationwide shortage with a lot of regional variation.
  • The need for these plans runs along supply and demand lines. In many areas there aren't enough child care workers or facilities, and costs are unaffordable for people who might want to take these chip-related jobs.
  • In some regions, care for one child costs 14-18% of a construction workers' gross wages, the presentation says.

What they're saying: The Commerce department said this was a necessary step to take, considering how low unemployment is in the regions looking to build plants. And child care support is a way to draw more workers into the labor market.

  • "We're not doing this for the sake of putting points on the board for child care policy, but we are acknowledging that when you look at the labor market right now, one of the largest factors keeping people out of the labor market is caregiving responsibilities," Caitlin Legacki, a senior adviser at the Commerce Department, told Axios.

What's next: The department is set to release its application on Tuesday, as the New York Times first reported, and companies will have to start figuring out child care strategies.

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