Child care a requirement for chip makers seeking billions in incentives

[tonyget]

Child care a requirement for chip makers seeking billions in incentives under Biden rules

Microchip companies seeking at least $150 million in federal assistance will have to submit plans to offer workers access to affordable child care.

www.usatoday.com

WASHINGTON — The Biden administration is requiring that microchip companies competing for a slice of $39 billion in federal incentives provide perhaps the biggest need for working parents: child care.

The Commerce Department is set to release parameters Tuesday for semiconductor companies who apply for federal assistance to build commercial manufacturing facilities through the $50 billions Chips and Science Act, which Congress approved last year.

Biden wants to transform the U.S. economy over the next decade to compete with China in the domestic manufacturing of leading-edge chips that are essential for smartphones, computers and cars.

But the effort faces a shortage of workers skilled in the field. That's why the Biden administration is mandating companies seeking at least $150 million in aid submit plans to offer workers – inside the facilities and during construction – access to high-quality, affordable child care.

The goal: remove a common barrier preventing many Americans, particularly women, from entering the workforce.

 

[blueone]

There are far too many strings attached to the CHIPS Act money. I wouldn't be surprised if the big three turn it down.

U.S. Aims to Chart New Course for Chip Industry

Companies receiving money to build domestic semiconductor facilities under the $53 billion Chips Act will have to meet a series of requirements imposed by the government.

www.wsj.com

Companies receiving incentives will be required to share part of their profits with the government and limit stock buybacks and dividends. Companies are also expected to use union workers, as well as U.S.-made iron and steel for the construction of facilities, while providing affordable child care for workers.

 

[tonyget]

Companies receiving incentives will be required to share part of their profits with the government and limit stock buybacks and dividends. Companies are also expected to use union workers, as well as U.S.-made iron and steel for the construction of facilities, while providing affordable child care for workers.

I agree. If companies are required to share part of their profits to the government，then it's not a subsidy，more like a public-private partnership. I too doubt big semi companies are interested in this

 

[coldsolder215]

Yet another hair brained policy from sinking DC rats who have been printing money into their own pockets for 15 years now. A thing that every other developed country subsidizes for their citizens should be responsibility of HR departments, amazing. America is ideologically incapable of addressing its worst problems (unaffordable childcare, healthcare, education, housing) and any one of those problems will sink a national capitalist endeavor like CHIPS.

 

[cliff]

National capitalist endeavor? Seems like a contradiction to me.

Every developed country... doesn't pay their NATO bill.

If you can't afford kids, don't have them.
Education... youtube instead.
Housing.... move to the midwest.

"Government is not the solution to our problem, government is the problem." -- Ronnie

"The problem with socialism is that you eventually run out of other people's money.' --Maggie

 

[cliff]

There are far too many strings attached to the CHIPS Act money. I wouldn't be surprised if the big three turn it down.

Really? I will give you odds.

 

[Tanj]

Having the companies provide child care will be a problem for the same reason our healthcare system is bonkers. The customer (parent or patient) is no longer the customer the provider has to answer to, and the employee is now even more deeply chained to the employer. If national policy needs to encourage and support parenting, do it without making employment part of the loop. It distracts the companies, screws up the mutual responsibilities, and creates one more totally irrelevant worry for workers.

 

[VCT]

Having the companies provide child care will be a problem for the same reason our healthcare system is bonkers. The customer (parent or patient) is no longer the customer the provider has to answer to, and the employee is now even more deeply chained to the employer. If national policy needs to encourage and support parenting, do it without making employment part of the loop. It distracts the companies, screws up the mutual responsibilities, and creates one more totally irrelevant worry for workers.

I know what you mean but Asian consider those as benefit. Also medicare, in Taiwan we don't need to see family doctor first.
Sometime while working, I don't even need to take a day off to see a doctor. I just tell my boss that I will go to a clinic and comeback 1-2 hrs later.
I believe TSMC has clinics in some Fabs.

 

[blueone]

I know what you mean but Asian consider those as benefit. Also medicare, in Taiwan we don't need to see family doctor first.
Sometime while working, I don't even need to take a day off to see a doctor. I just tell my boss that I will go to a clinic and comeback 1-2 hrs later.
I believe TSMC has clinics in some Fabs.

In the US many people have medical benefits that don't require you to get a referral from a family doctor to see a specialist. I never took a day off from work just for a medical appointment. Some large employers in the US are like TSMC, I think Intel is, and have clinics in their facilities so that employees can get simple procedures done without even leaving the campus.

 

[Tanj]

In the US many people have medical benefits that don't require you to get a referral from a family doctor to see a specialist. I never took a day off from work just for a medical appointment. Some large employers in the US are like TSMC, I think Intel is, and have clinics in their facilities so that employees can get simple procedures done without even leaving the campus.

Yep, and there is no reason that cannot be arranged without the company owning your health insurance.

It makes no sense that when you change jobs, even staying in the same town, you may lose access to your doctor because everything is tied to a different insurance, never mind if you quit your job and do not have another lined up. And it make no sense for this to be endorsed by government rules and tax breaks. In the USA the system was started as a hack but it has become a problem. Companies are burdened with an extra administrative function, and individuals outside of corporations have increasingly limited access to health care because the whole system has optimized for corporate relationships.

It is a bad idea to copy this for something new, like child care.

 

[cliff]

Tanj, I totally disagree with you. The US employers (like me) are incentivized to pay for their employees insurance by allowing the companies to pay directly to the healthcare provider, thus no payroll taxes towards that benefit. In fact, any benefit I can give my people by paying in gross dollars, I do it. I believe most engineering companies who want to keep their talent probably already do that. Employers who don't pay for insurance probably pay a bit more in salary, and the employee gets to decide if they like that arrangement, or they can seek work elsewhere.

Burdened... no. Payroll services such as Gusto handles it and provides the employee and employer with many choices. I assume other payroll services do the same thing. It is far easier to handle administration tasks now than 20 years ago due to terrific online services. Employers can now be free to lay off their HR departments. It is now push button.

As far as chains (previous comment), well they are soft linked. Employees and employer need each other, and if you don't like your job, leave, and make the adjustment.

 

[Tanj]

Tanj, I totally disagree with you. The US employers (like me) are incentivized to pay for their employees insurance by allowing the companies to pay directly to the healthcare provider, thus no payroll taxes towards that benefit. In fact, any benefit I can give my people by paying in gross dollars, I do it. I believe most engineering companies who want to keep their talent probably already do that. Employers who don't pay for insurance probably pay a bit more in salary, and the employee gets to decide if they like that arrangement, or they can seek work elsewhere.

In other words, you get the tax break for a benefit delivered to employee. The government could choose to deliver that benefit to the employee, and you would then pay to the employee the same amount reducing your profit, so it would be a wash for you. I don't doubt you want to retain your employees and would pay them well. The issue is that the tax benefit has been locked to you, becomes a condition of employment, and excludes the employee from exercising their own control over their own health care. They cannot seek a different arrangement elsewhere because the tax code causes this behavior to be everywhere.

Burdened... no. Payroll services such as Gusto handles it and provides the employee and employer with many choices. I assume other payroll services do the same thing. It is far easier to handle administration tasks now than 20 years ago due to terrific online services. Employers can now be free to lay off their HR departments. It is now push button.

So, the employee is now two steps distanced from involvement in their own health care. This makes perfect sense for you - indeed it is precisely because you do not want the burden that you outsource it. But that increases the distance in what should be a direct market relationship between employee and their medical care.

As far as chains (previous comment), well they are soft linked. Employees and employer need each other, and if you don't like your job, leave, and make the adjustment.

Absolutely. Pay them for the work, expect them to do the work. This has nothing to do with government warping the system with tax incentives that drive health care through the employer. What is next, are you going to clothe and bathe them, too? Provide dormitories, introduce them to their spouses? Hey, it happens in some parts of the world. I don't think that is a system of personal freedom.

I find it surprising that you feel relaxed to be intruding in the life of your employees and embracing government tax incentives that encourage it. That is a socialist pattern, not individual freedom. The free approach is that neither you nor the government have any justification for policies that get between people and their health providers and decisions. Those should be separate from employment decisions.

 

[cliff]

Interesting observation. Actually, I believe in employees who are owners who wear golden handcuffs. I am 100% capitalist/libertarian. I want employees to make millions and work there asses off. Anything I can pay on gross dollars I do. Why wouldn't I? It's math.

My company is 100% US born, but I agree with Morris Chang's views... all of them. We run an 1960's style company. You wouldn't like it.

 

[cliff]

Tax incentives? No, I am providing health care to my employees. That makes the govenment happy. That is why they do it, rather than [ultimately]making the tax payers pay when people (including illegals) use the emergency room as a family doctor.

 

[cliff]

Provide dormatories... actually yes, we rented houses so new grads didn't have to move to the company and sign 1 year leases. Isn't that terrible? I can't understand why I am able to sleep at night.

 

[Tanj]

We run an 1960's style company. You wouldn't like it.

Oh, I've worked in many places, and had golden handcuffs (was not me that broke them). I work for myself now. No problem with your setup.

The origin of this was discussion of fabs, which are corporate hives. And my irritation is with the distorting effect of government policy, which saturates the health care market in a way which squeezes out the alternatives. I observe a declining quality of service in health care, with a complete breakdown in treating the patients as customers (since they are not, at several removes now) as well as treating the doctors as cogs in the wheel (I have seen two of my doctors quit in frustration in the past 15 years, despite being in a lucrative city for the duopoly hospitals). If your little kibbutz has somehow found itself well served, treasure it, because the health care system is not so smooth elsewhere and the devil's bargain Eisenhower drove has, like most government distortions, soured.

 

[benb]

Childcare is a big expense. For 5 years, going forward, at least $20K a year per child; many people have 2 children in that timeframe. So it creates incentives for one parent or the other not to work, so you can reduce or eliminate that cost.

Since the 1970s, there was a change, many more women (and men) went to work despite having young children. That created a problem for employers, as women (and men) were in a difficult position of working and caring for children, having two jobs essentially. This led to absences from work, obviously for childbirth, but then for all the things parents do for children, that requires time away from work, and prevents parents from being able to travel, or work overtime, or do other things employers would like their best employees to do.

The bottom line: The cost of childcare is high, on both families and employers. Employers gradually started paying women generally less. Single parent women with custody the least. Dual parent women more. So the pay cut was in proportion to the burden, which could be spread out with two parents, which has always seemed highly probitive to me. In other words, solving childcare solves the gender pay gap.

In 2023 there is another problem, demographic decline. There aren’t enough children to repopulate, without immigration. Immigration robs peter to pay paul. Childcare could neutralize the dis-incentives to have children, neutralize the dis-incentive to work, reduce the incentive to terminate pregnancy, and accomplish “Republican stuff”.

Imagine a single mom being able to get a job at a fab, put her child in a good pre-pre-Headstart facility, nearby, work a shift and get the child and go home. Sounds good to me.

 

[cliff]

So childcare next to the company and paid by the company with gross dollars... good idea.

 

[blueone]

I've been saying it:

South Korea Says U.S. Chips Act Subsidies Have Too Many Requirements

Seoul’s Trade Ministry says there are too many strings attached for chip makers such as Samsung and SK Hynix to apply for federal funding intended to boost domestic production.

www.wsj.com

Edit: it looks like Cliff owes me money.

 

[Jert]

It maybe true there are many strings attached, but the biggest string that the South Koreans want the US to remove is the restriction on recipients attempting to build additional advanced fabs in China, which in today's world is considered enemy territory from US perspective. It maybe indicative that South Koreans cares nothing about US national security, despite god knows how many trillions the US has already spent protecting them from the the big fat thug up north.