New federal rules are being introduced that any semiconductor manufacturer looking to get money from the CHIPS Act must provide affordable, high-quality child care for workers.
- Last year, the CHIPS Act was passed, giving nearly $40 billion to boost semiconductor chip manufacturing in the U.S. to boost internal manufacturing and ease reliance on outside parties.
- A survey from the Bipartisan Policy Center in Washington found that in 35 states, more than 11 million children needed child care, while less than 8 million spots were available.
- The Commerce Department plans to announce new rules that raise both situations by stipulating that any semiconductor manufacturer looking to get money from the CHIPS Act must provide adequate child care for workers.
Why it’s news
Since the pandemic, there has been a massive imbalance in the supply-and-demand relationship because the need for child care and the ability to provide it. There has been a decrease in child-care workers, which has hurt child-care workplaces and parents needing a place for their children while they return to work.
The Commerce Department’s effort essentially adds to the demand side. The Biden administration is introducing new rules (not passed by the U.S. Congress) that semiconductor factories must provide adequate child care for workers.
The Commerce Department is expected to announce the change soon and explain that the companies that receive the subsidies to build the semiconductor plants can use some of the money to meet the new child-care requirements.
There are specific requirements, but Commerce officials will not decide how companies choose to offer child care. The new plants could build new child-care facilities, use the money to pay existing facilities to accept the children, or whatever they deem fit as long as it is affordable and high-quality care.
Critics argue that it’s not the job of the Commerce Department to decide this, rather, it should go through the channels of Congress so the topic can be properly debated.
Besides, they say, it’s bad economics. “The reason that child care is unaffordable for many families is ultimately a supply-side problem that … could actually be made worse by subsidizing the demand side like this,” writes Eric Boehm in Reason. “Without repealing those supply-side constraints on the availability of child care, increased subsidies that flow to only a handful of workers will likely allow those families to afford care at the expense of others. The overall availability of child care won’t increase, and the subsidies will likely only inflate costs—as they always do.”
The Commerce Department is expected to soon release an application for new semiconductor plants looking to receive money and child care benefits along with more details of its plan.