How Public Investment Can Create Jobs and Ease the Childcare Crunch

Many American families are struggling to pay for child care, with the average price for licensed providers now nearly$11,000 a year. These high prices can be a huge barrier for workers, particularly women, forcing many to cut back on hours or drop out of the workforce entirely.

A new federal program aims to help break down these barriers by requiring corporations receiving government subsidies to submit plans to meet the child care needs of their workforce.

So far, this requirement only applies to companies receiving subsidies of more than $150 million through the 2022 CHIPS and Science Act. But this initiative could become a model for using the power of the public purse to expand child care options in manufacturing communities.

The CHIPS Act’s main objective is to double U.S. production of semiconductor chips by the end of the decade, creating thousands of good jobs for a diverse workforce. To qualify for a significant slice of this historic bill’s $39 billion in subsidies, corporations must submit plans to provide child care services for their manufacturing and construction workers.

The semiconductor manufacturing workforce is projected to grow by 33 percent over the next decade, but there are not enough qualified workers to fill these new positions. Companies can address this gap by recruiting, training, and retaining workers who are underrepresented in the sector, including women. The CHIPS child care requirement is a recognition that supportive services are critical to achieving that goal.

Ideally, CHIPS grantees will partner with state and local governments, community-based organizations, and labor unions to develop child care plans that meet local needs and ensure quality wages and working conditions for early educators. Developing community benefit agreements that integrate the companies’ workforce commitments with child care strategies and community feedback is one possible approach.

Poorly implemented plans could exacerbate inequities in the child care sector. For instance, if companies don’t expand child care supply in communities with semiconductor production facilities, the increased demand will drive up tuition prices and reduce child care availability for local families.

Partnering exclusively with corporate child care providers could also create the risk of expanding private equity firm ownership of such services. This model has a poor track record of undermining children’s safety, early educators’ wages, and community- and home-based child care providers.

At the Century Foundation, we’ve been closely monitoring two CHIPS grantees — Intel and Micron — and seeing some hopeful signs.

In Oregon, where Intel is planning to expand one of their facilities, a new law engages community stakeholders and combines state funds with CHIPS grantee contributions to expand child care capacity near semiconductor factories.

Micron’s preparations for a new plant in New York have involved working with state and community leaders to grow supply by offering on-site child care and by funding a program to help New Yorkers start their own home-based child care programs.

Micron will also offer workers child care subsidies, which, when paired with its plans to build supply, can make child care more affordable without driving up costs for local families.

If well implemented, the CHIPS program will demonstrate that public investment in both physical and care infrastructure are key to growing our economy. Our ultimate goal remains guaranteed child care for every family. All children deserve the opportunity to be cared for in settings that allow them to thrive, and parents need the peace of mind that their children are safe and nurtured while they’re on the job.