Comment: Biden’s Chips Act may have broader impact on child care

By Julianna Goldman / Bloomberg Opinion

Child care is not a topic that tends to come up on quarterly earnings calls. By and large, however, corporate America knows that it has to offer quality and affordable child care to employees to recruit and retain a competitive and diverse labor force.

But there is a difference between knowing something and doing something about it. Sometimes the private sector needs a nudge from the federal government, which helps explain President Biden’s intervention in the semiconductor industry: The administration announced last month that if semiconductor manufacturers wanted a slice of $40 billion in new subsidies under last year’s Chips Act, they would have to provide access to child care.

One question is whether this strategy makes sense. Another is whether it is a one-time thing; or the beginning of a larger effort to make the so-called care economy a reality.

A clue to the second question will come from how the administration deals with other contracts and contractors. A 2015 executive order, for example, requires federal contractors to provide seven days of paid sick leave, which has been shown to increase productivity, improve retention and keep other workers from getting sick. In other words, it improves the efficiency of government contracting.

Can the Biden administration make similar arguments about child care? As Bloomberg Opinion’s Sarah Green Carmichael notes, the U.S. Chamber of Commerce suggests that it has many similar benefits.

Then there are the contracts related to the $1.2 trillion infrastructure bill. Women are projected to account for only 29 percent of the 800,000 jobs created each year by the law, according to the National Partnership for Women and Families. States and localities receiving funding for some transportation projects already have to provide access to affordable housing. Those rules could be extended to require or encourage employers to provide child care.

The federal government can use its purchasing power in the marketplace “to achieve broader economic and societal goals,” says Joseph Parilla, director of Applied Research at Brookings Metro, who has studied the economic effects of Micron Technology’s plans to build the country’s largest semiconductor facility in Syracuse, N.Y. If the U.S. wants a robust chip industry, he says, “there are all sorts of things you have to do to invest in workers.”

Viewed in that context, the policy makes sense. The government is pouring hundreds of billions of dollars into a domestic semiconductor to compete with China. Companies are building plants in regions with low unemployment and limited child-care options. Meanwhile, according to the Century Foundation, less than 11 percent of workers in the semiconductor industry are women.

The bottom line: Men and women — but let’s face it, it’s largely women who do most of the caregiving — need child care to go to work. The federal government is right to use its market power to expand its availability.

At the same time, this policy is not a substitute for legislation. It benefits only workers in a defined sector and don’t address the broader problem of affordability.

“Child care first and foremost is a business,” says Linda Smith, director of the early childhood initiative at the Bipartisan Policy Center. When it costs more to provide a product — in this case, a child-care spot — than the consumer can afford to pay, then the business model is broken. One-third of children who need care in this country don’t have it, she notes.

Some advocates for more child care are worried that Biden’s policy will backfire politically. But 88 percent of Democrats, 61 percent of Republicans and 70 percent of swing voters support more federal funding to increase child-care options, according to a poll taken last November. Reflecting that widespread support, proposals in the House and Senate — from Republicans and Democrats — were introduced last year and are expected to be revived in the coming months.

So even if Biden’s policy doesn’t have a big impact, the workplace it could be a way to nudge lawmakers back to the negotiating table. They might even be able to make some progress.

Julianna Goldman is a Bloomberg Opinion columnist who was formerly a Washington-based correspondent for CBS News and White House correspondent for Bloomberg News and Bloomberg Television. She is also the founder of MamaDen, a group that connects and supports mothers and offers resources for women who want to stay in or return to the workforce.