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Tech group urges Biden administration to keep child care requirement for chips funding

Gina Raimondo, US secretary of commerce, speaks at Georgetown University’s School of Foreign Service in Washington, DC, on Thursday, Feb. 23, 2023.

Al Drago | Bloomberg | Getty Images

Standing against conservative critiques of the Biden administration’s conditions on computer chip-manufacturing funding, the tech industry group Chamber of Progress urged the government to maintain its requirements, which include providing child care for workers.

The group counts Apple, Amazon, Google and Meta among its corporate backers. Though they are not the target audience to receive the funding created by the CHIPS and Science Act, Chamber of Progress spokesperson Chris MacKenzie said it’s important to the group that the program run both effectively and on time, since chip manufacturing is important to the entire tech economy in the U.S.

In the letter to Commerce Secretary Gina Raimondo shared exclusively with CNBC, Chamber of Progress and the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship wrote that competitive benefits and fair labor practices are necessary to achieve the CHIPS Act’s “grand scope” both on time and on budget.

MacKenzie said the group aimed to push back on GOP attacks on so-called wokeness in business. In the letter, they argue that incentivizing child care is good business. It will encourage more women and people from underrepresented racial backgrounds to enter or remain in the chip manufacturing field, they wrote, an essential step for the industry to maintain a robust workforce.

Firms like Intel and Taiwan Semiconductor Manufacturing Co. (TSMC) are among those hoping to take advantage of the funding for their plans to build major chipmaking facilities in the U.S. Both companies have already announced massive projects to build up U.S. chip-manufacturing capacity. But the strings attached to the government money have raised concerns among the industry and conservatives.

Earlier this month, The Wall Street Journal reported that TSMC was worried about rules involving profit-sharing of surplus gains and providing details about operations. Chairman Mark Liu called some of the conditions “unacceptable” at an industry event in Taiwan last month, according to the Journal, adding they “aim to mitigate any negative impact from these and will continue discussions with the U.S. government.”

Some Republicans have also railed against the rules.

“What President Biden is doing by jamming woke and green agenda items into legislation we pass is making it harder for him to ever get legislation passed again,” said Sen. Mitt Romney, R-Utah, who supported the law’s passage, according to The Associated Press.

But the Commerce Department has maintained that the rules are necessary to protect taxpayer dollars and ensure a stable workforce.

“We simply will not be successful in achieving the national security goals of the CHIPS initiative unless we invest in our workforce, period. Full stop,” Raimondo told CNN in an interview published in late February. “For decades, we’ve taken our eye off the ball with manufacturing, which means the worker supply of people with the skills to do super technical manufacturing has withered. And so, we need to be honest about that, but also embrace it as an opportunity to come up with creative solutions.”

The $52 billion law was designed to strengthen the chip-manufacturing industry in the U.S., limiting dependence on other countries and shoring up the supply chain for an important component used in computers, cars and medical equipment.

In their letter Monday, the chambers also argued that wage and labor contract requirements serve an important business purpose for controlling costs and timeline. They applauded stipulations that would bar companies that accept government money from pursuing stock buybacks for five years. And they supported a policy to require those companies to share a portion of the surplus returns they receive after accepting CHIPS Act funding with the U.S. government, beyond what they projected in their proposals.

“To ensure continued political and public support for the program, implementing strong transparency measures and safeguards now is the best path forward,” the groups wrote.

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WATCH: Commerce Department sees more than 200 companies interested in CHIPS Act funds

Commerce Department sees more than 200 companies interested in CHIPS Act funds

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