Industrial Sabotage. Government-Style

Naturally, we all thrilled at the prospect of America becoming less reliant on foreign semiconductor manufacturers. We were ecstatic to see that Congress had allocated some $50 billion to new chip making facilities.

As noted in the past, the founder of Taiwan Semiconductor has already declared it all a bust. Not enough money and not enough people who would be capable of doing the new jobs.

The Wall Street Journal reports in an editorial this morning, that, in the best circumstances, America’s market share would barely budge:

The money may not even boost U.S. chip manufacturing by much. Goldman Sachs last autumn estimated the subsidies might increase the U.S. market share of global chip capacity by less than 1%.

Just in case you got your hopes up, the Commerce Department, led by someone named Gina Raimondo, has decided to dictate conditions for companies that want to access the new funding. As you might guess, and as the Journal outlines, the conditions are a progressive wish list.

America’s problem has always been excessive regulation, the kind that increased the cost of producing chips. By the Journal’s calculus, it costs 40% more to produce here than it does to produce overseas.

Consider this:

The chip makers will be obliged to provide child care, because if we do not have enough young mothers working in these factories, they will grind to a halt.

This is so stupid that we feel obliged to point out that it is not a joke:

Start with child care, which chip makers applying for more than $150 million in federal aid will be required to provide to their employees and construction workers. Finding workers to run child-care facilities, especially in rural areas, may prove even more challenging than finding workers to build and operate the plants. The U.S. child-care workforce is still 58,000 smaller than before the pandemic. By boosting demand for child care, Commerce’s mandate will increase costs for all parents living near a chip plant.

And, of course:

She justifies this gigantic intervention in the private economy by claiming that chip makers won’t be successful unless they “find a way to attract, train, put to work and retain women.” But companies don’t need the government to tell them how to attract and retain workers. Ms. Raimondo’s mandates will merely raise business costs.

If you thought it was going to be difficult to find technical talent to run the factories, the Journal points out that finding qualified child care workers in certain parts of the country will be even more difficult.

To raise the bar, the Commerce department insists that this all occur with the direct connivance of labor unions. It’s a good way to increase cost while decreasing efficiency.

Chip makers will have to craft their “child care plans in tandem with community stakeholders, including state and local governments and local groups with expertise administering child care”—i.e., labor unions and progressive outfits. Start the woke indoctrination early.

And also:

Chip makers will also have to pay construction workers prevailing wages set by unions and will be “strongly encouraged”—i.e., required—to use project labor agreements (PLAs), which let unions dictate pay, benefits and work rules for all workers. States restricting PLAs may have to change their laws if they want to benefit from the federal largesse.

And, of course, the government also wants to dictate the benefits that companies must provide:

Companies will have to comply with the Administration’s “Good Jobs Principles” that guarantee “full-time and part-time workers are provided family-sustaining benefits that promote economic security and mobility,” including “paid leave and caregiving supports.”

In their applications, chip makers will have to describe their “wraparound services to support individuals from underserved and economically disadvantaged communities,” such “as adult care, transportation assistance, or housing assistance.” The Administration is imposing a cradle-to-grave welfare system via corporate subsidies.

So, a good idea comes a cropper when mixed with crippling progressive policies. Sad, but true. If you had thought that America was going to compete against the world's great semiconductor manufacturers, think again.