New Institute for Policy Studies Report Highlights Common-Sense Measures to Ensure Promise of Good Jobs in CHIPS Semiconductor Industry Is Realized

Washington, D.C. – On August 22, the Institute for Policy Studies will release a groundbreaking new report, “Leveraging the CHIPS Program to Create Good Jobs for All Semiconductor Workers,” which debunks worker shortage myths and uncovers several workplace concerns in the semiconductor industry, including low pay, exposure to dangerous toxic chemicals, grueling schedules, and lack of advancement opportunities. With up to a staggering $175 billion in subsidies and investment tax credits set aside for the industry and 16 manufacturing subsidy contracts in the final stages of negotiations, now is a crucial time for the Biden-Harris administration to use the power of the public purse to protect workers.

The report proposes several common-sense measures to ensure that the implementation of  the 2022 CHIPS and Science Act delivers on the administration’s promise of creating high-quality jobs with strong worker protections.

“CHIPS contracts offer an important opportunity to make good on the Biden-Harris administration’s promise to create new, good jobs for U.S. workers,”  said Chris Mills Rodrigo, lead author of the report and Managing Editor of Inequality.org at the Institute for Policy Studies. “Unfortunately, our research, which draws from industry-wide data and worker interviews, reveals that many semiconductor jobs simply aren’t the high-paying, high quality jobs communities are expecting or deserve. The findings in our report demonstrate  the clear need for stringent rules and strong workforce commitments in the final contracts to ensure new CHIPS subsidies improve semiconductor industry jobs and not just top executives’ bottom line.”

Combining key data with compelling firsthand accounts from semiconductor industry workers, the report identifies several key areas of worker concern that should be addressed before doling out billions in public funds to firms:

• Lack of advancement opportunities

• Exposure to dangerous toxic chemicals

Among key findings, the new analysis highlights: 

• Worker shortage complaints are overblown
  • Although the semiconductor industry claims that there are not enough workers to meet the job demand created by the CHIPS Act, analysis of job projections and graduation rates in STEM fields show no evidence of a shortage.
  • Instead, problems with recruitment and retention are related to job quality. 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. 
• Pay is too low
  • High average salaries in the semiconductor industry obscure the reality of the workers actually producing chips: average pay at around or below $20 an hour and constant stoppages that leave hourly wage workers struggling to make ends meet.
  • Workers hardly ever get raises and have little to no opportunities to move up internally. Many reported having to work extra unpaid hours on top of exhausting 12-hour days just to be considered for openings.
• Protections from toxic chemicals are inadequate
  • Despite pledges from semiconductor companies in the 1990s to phase dangerous chemicals out of their processes, cases of miscarriages and cancer are worryingly high among the global workforce.
  • The standards of exposure set by the Occupational Safety and Health Administration are, by its own admission, woefully “outdated and inadequate for ensuring protection of worker health.” OSHA only has limits in place for some 500 of the tens of thousands of chemicals used in the fabrication process, and the limits that are in place are magnitudes less restrictive than standards set elsewhere or what the biomedical research says is safe.

The report proposes several recommendations for the CHIPS program to meet its full potential for American workers: 

• Adherence to Good Jobs Principles: The Department of Commerce, which has taken the lead in administering the CHIPS program, should collaborate more closely with jobs experts at the Department of Labor to ensure that CHIPS grantees abide by the “Good Jobs Principles.” 

• Transparency: Commerce should require that semiconductor firms commit to strong and enforceable workplace commitments like minimum job creation numbers, training investments, and living wages. The companies should release this data publicly or face the prospect of losing funding. There should also be full transparency regarding chemicals in use, empowering workers and communities to protect their health and safety.

• Stop executive enrichment: Commerce should exercise its statutory authority to bar firms receiving CHIPS funding from engaging in stock buybacks to ensure that federal money is flowing to workers, not executives.

• Protect union rights: 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. 

Read the full report. 

The new report comes after Senators Edward J. Markey (D-MA), Elizabeth Warren (D-MA), Bernie Sanders (I-VT), and Ben Ray Luján (D-NM) delivered a letter to Secretary of Commerce Gina Raimondo “urging the agency to ensure recipients of Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act incentives maintain high standards for worker welfare, community safety, and environmental health.” 

Meanwhile, a July report from the Institute for Policy Studies and the Americans for Financial Reform Education Fund found that computer chip companies currently in line for $30 billion in subsidies spent more than $41 billion on stock buybacks between 2019 and 2023, underscoring the need for strong incentives to ensure CHIPS contracts enrich the semiconductor manufacturing base, not just top executives and shareholders.

Read the full report. 

To speak with lead author Chris Mills Rodrigo for a comment or interview, contact IPS Deputy Communications Director Olivia Alperstein at (202) 704-9011 or olivia@ips-dc.org.

About the Institute for Policy Studies

For over six decades, the Institute for Policy Studies has served as a multi-issue research institution conducting path-breaking analyses on inequality issues and bold policy solutions to bridge the racial, wealth, and income gaps that divide us. IPS’s Inequality.org website provides an online portal into our latest research, in the United States and throughout the world. Sign up for our weekly newsletter at: Inequality.org/subscribe.

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