The Cost of DEI

The Biden administration is all-in for diversity. It has not given much thought to the consequences of writing diversity into legislation designed to onshore manufacturing.

This applies especially to what is called the CHIPs Act, a piece of legislation designed to bring semiconductor production to our nation. 

Surely, the intention is good. We do not want to depend on foreign nations that we are talking trash about. And yet, between the legislation and its implementation has fallen a shadow, the shadow of DEI, diversity, equity and inclusion.

Matt Cole and Chris Nicholson explain it in The Hill-- in an article, about how DEI killed the CHIPS Act.

DEI, they explain, has:

… infected the supply chain that makes the chips powering everything from AI to missiles, endangering national security.

They add that this is a sign of a nation in decline:

This is the stuff declining empires are made of. As America pursues national security by building a diverse workforce, China does it by building warships.

For instance, Intel has slowed down production of its Columbus factory. The Taiwan Semiconductor Manufacturing Company has delayed production of its second Arizona plant. And Samsung has delayed production in Texas. 

These have all been sundered by the CHIPS Act, especially its DEI requirements. The authors explain:

… the CHIPS Act is so loaded with DEI pork that it can’t move.

The law contains 19 sections aimed at helping minority groups, including one creating a Chief Diversity Officer at the National Science Foundation, and several prioritizing scientific cooperation with what it calls “minority-serving institutions.” A section called “Opportunity and Inclusion” instructs the Department of Commerce to work with minority-owned businesses and make sure chipmakers “increase the participation of economically disadvantaged individuals in the semiconductor workforce.

Of course, no one considered that the minority talent simply did not exist. No one understood that giving people credentials they did not earn does not qualify them for high-tech jobs.

The perfect candidate would be like Karine Jean-Pierre, who checks all the boxes but is splendidly incompetent. The only thing she lacks is a criminal record.

There’s plenty for the left—requirements that chipmakers submit detailed plans to educate, employ, and train lots of women and people of color, as well as “justice-involved individuals,” more commonly known as ex-cons. There’s plenty for the right—veterans and members of rural communities find their way into the typical DEI definition of minorities. There’s even plenty for the planet: Arizona Democrats just bragged they’ve won $15 million in CHIPS funding for an ASU project fighting climate change.

So, the companies that set out to build facilities in America quickly discovered that DEI was not their friend. They were obliged to fly in workers from Taiwan, but then the labor unions objected.

Because equity is so critical, the makers of humanity’s most complex technology must rely on local labor and apprentices from all those underrepresented groups, as TSMC discovered to its dismay.

Tired of delays at its first fab, the company flew in 500 employees from Taiwan. This angered local workers, since the implication was that they weren’t skilled enough. With CHIPS grants at risk, TSMC caved in December, agreeing to rely on those workers and invest more in training them. A month later, it postponed its second Arizona fab.

And, of course, the law requires the company to hire women construction workers, even though there are barely any women construction workers. Better yet, they are obliged to provide childcare.

For instance, chipmakers have to make sure they hire plenty of female construction workers, even though less than 10 percent of U.S. construction workers are women. They also have to ensure childcare for the female construction workers and engineers who don’t exist yet. They have to remove degree requirements and set “diverse hiring slate policies,” which sounds like code for quotas. They must create plans to do all this with “close and ongoing coordination with on-the-ground stakeholders.”

The company is now building in Japan.

Now TSMC has revealed plans to build a second fab in Japan. Its first, which broke ground in 2021, is about to begin production. TSMC has learned that when the Japanese promise money, they actually give it, and they allow it to use competent workers. 

And the company is researching opportunities in Europe and Israel. The authors explain:

TSMC is also sampling Germany’s chip subsidies, as is Intel.

Intel is also building fabs in Poland and Israel, which means it would rather risk Russian aggression and Hamas rockets over dealing with America’s DEI regime. Samsung is pivoting toward making its South Korean homeland the semiconductor superpower after Taiwan falls.

The authors draw a stark conclusion:

In short, the world’s best chipmakers are tired of being pawns in the CHIPS Act’s political games. They’ve quietly given up on America.

When you hear politicians complaining about our reliance on foreign manufacturers, you might remind them that this is a self-inflicted wound. All of the world’s caterwauling is not going to build a factory that can produce advanced semiconductors.

And yet, reality notwithstanding, diversity quotas are alive and well. The semiconductor manufacturing story allows us to measure the cost of DEI. In other fields, it is more difficult to measure the cost of this folly.

For the record, consider this. The Mayo Clinic in Phoenix is hiring a licensed ambulatory practical nurse for its ambulatory cardiology department. 

It has announced that it will grant preferences to people who are refugees, neurodivergent, single parent, blind or low vision, deaf or hard of hearing, black, hispanic, military veterans, the elderly, the LBGTQ and justice impacted individuals.

Fair enough, we are talking about a practical nurse, which is not exactly the same thing as a heart surgeon. Still, how confident would you be of the care you would receive from someone who had been hired for checking all the right diversity boxes? A nurse who can barely hear or see-- is that what you want when you go to the hospital?

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