US issuing new childcare guidance for semiconductor chips subsidy programme

THE Biden administration on Monday (Mar 27) will release new guidance for its US$52 billion US semiconductor manufacturing and research programme detailing how companies seeking major awards must provide affordable high-quality childcare.

The Commerce Department plans to begin accepting applications in late June for a US$39 billion manufacturing subsidy programme. The law also creates a 25 per cent investment tax credit for building chip plants, estimated to be worth US$24 billion.

The workforce guidance document seen by Reuters says the Commerce Department is “not requiring or expecting applicants to provide free care” but adds that those seeking funding “should strongly consider defraying the price of care such that it is within reach for low- and medium-income households.”

The department in the guidance strongly encourages the use of project labour agreements in connection with construction projects and said applicants that do not commit to using an agreement “will be required to submit workforce continuity plans and show that they have taken other measures to reduce the risk of delays in project delivery.”

The agreements are collective bargaining agreements between building trade unions and contractors.

The document says workforce development plans must detail “specific commitments of proactive employer engagement and mobilisation and efforts to train and hire workers into good jobs that offer competitive wages, including by offering programmes to expand employment opportunities for economically disadvantaged individuals.”

“We won’t be able to build the semiconductor workforce needed unless more of America’s workers have the chance to get into these jobs,” Commerce Secretary Gina Raimondo said in a statement included with the guidance.

Some Republicans have criticised Commerce Department conditions including childcare requirements.

The department last month said it would require companies to share excess profits in some instances.

Semiconductor companies have already announced more than 40 new projects including nearly US$200 billion in private investments to increase domestic production. REUTERS