Leveraging the CHIPS Act to Create Good Jobs for All Semiconductor Workers

Billions of public dollars will begin flowing to semiconductor manufacturers in the next few months as part of the 2022 CHIPS and Science Act, legislation aimed at boosting domestic production of the tiny components crucial for the functioning of almost all electronics.

The Biden-Harris administration pitched this historic public investment of up to $175 billion in loans and grants as a way to both secure American supply chains and create thousands of high quality jobs.

But, according to a new Institute for Policy Studies report, there are real problems with semiconductor jobs that should be addressed before backing up the Brinks truck for companies.

For many top tier workers in the industry, salaries are far above the U.S. average. But workers, observers, and lawmakers have raised several concerns about working conditions — including insufficient wages, taxing schedules, and exposure to toxic chemicals.

This new report combines worker interviews and industry data to make the case that workplace conditions in the semiconductor industry must be improved — and that the CHIPS program must do more to fulfill its promise to working people.

The state of the industry

Semiconductor production and employment has fallen drastically in the United States since its apex in the late 1990s. A little under 400,000 workers are currently employed in the industry, but that number is set to increase with all the new government funding and private commitments to retrofit and construct factories, known as “fabs.”

Although the semiconductor industry claims that there aren’t enough workers to meet the job demand created by the CHIPS Act, job projections and graduation rates in related fields show no evidence of a shortage. 

The problem, it seems, is about the quality of jobs on offer. Surveys have found that over half of workers in semiconductors and electronics are considering leaving their jobs in the next six months, often because of low pay, lack of job advancement opportunities, and challenging schedules. 

Instead of pedaling narratives about worker shortages — which are often used to distract from legitimate job quality concerns or justify hiring from outside of local communities — the industry should get serious about becoming an attractive place to work.

Pay and advancement

High average salaries in the semiconductor industry obscure the reality of the workers actually producing chips. Half of manufacturing workers make less than $20 an hour and many factories have frequent unpaid work stoppages that leave hourly wage workers struggling to make ends meet. 

Companies in line to receive CHIPS Act funding are offering similar pay — Microchip Technology is hiring material handlers for as little as $17 hourly while GlobalFoundries is currently recruiting technicians starting at $32,000 per year. By comparison, the U.S. average salary in 2022 was $63,795.

Workers hardly ever get raises and have little to no opportunities to move up internally. Several interviewed for this report said they have to work extra unpaid hours on top of exhausting 12-hour days just to be considered for openings. And they need to be available at all hours, including weekends and during vacations, contributing to serious burnout.

Workplace safety

The proprietary mix of chemicals used in semiconductor production have been linked to increased rates of cancer and miscarriages. And while companies pledged to remove dangerous toxins from their procedures in the mid-1990s, evidence from chips workers abroad suggest that workers are still at risk.

The Occupational Safety and Health Administration admits that its own chemical exposure limits are outdated and inadequate. 

Federal standards cover only 500 of the now tens of thousands of chemicals that can be used in semiconductor production and are magnitudes less restrictive than the medical community recommends. 

What the Biden-Harris administration should do 

The Department of Commerce should put in place four guardrails before finalizing any contracts for CHIPS money to ensure that public funds go to well-paid workers rather than merely further enriching top executives.

First, the agency should collaborate more closely with jobs experts at the Department of Labor to ensure that CHIPS grantees abide by the “Good Jobs Principles” the Biden-Harris administration adopted in 2022 to define a high quality job. 

To increase accountability to these principles, Commerce should require that semiconductor firms abide by and disclose information related to enforceable standards such as  minimum job creation numbers, training investments, living wages, and chemical use. 

The agency should also exercise its statutory authority to bar firms receiving CHIPS funding from engaging in stock buybacks to ensure that federal money is flowing to workers rather than inflating CEO stock-based pay. 

Finally, although the CHIPS Workforce Development Guide says that companies “should remain neutral during organizing activity,” the semiconductor industry has a history of harsh responses to unionization efforts and responses to some early organizing efforts suggest that the same hostility towards labor remains. Commerce could avoid history repeating itself by promoting labor peace agreements between semiconductor firms and unions. 

All semiconductor workers contribute value to their industry and should be fairly rewarded for their labor. As one manufacturing technician at a Micron fab in Manassas, Virginia said in an interview: “We have hands on the product. Without us in that fab, there would not be a product to sell.”