CHIPS Act: U.S. Commerce Secretary Raimondo talks childcare affordability, accessibility for chipmakers

U.S. Commerce Secretary Gina Raimondo joins Yahoo Finance Live’s Julie Hyman to discuss the CHIPS Act and providing affordable and accessible child care to chipmaker employees amid a tight labor market.

Video transcript

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- All right, well, from iPhones to chipmakers now, applications opening for companies to receive CHIPS Act funding. But it comes with stipulations for businesses. We chatted with US Commerce Secretary Gina Raimondo about the broader implications behind child-care requirements in the CHIPS Act. Joining us Yahoo Finance's Julie Hyman. Hey, Julie.

JULIE HYMAN: Hey there, Rachelle. Yes, I talked to Commerce Secretary Raimondo yesterday. And we talked about some of those stipulations, some of those conditions that are attached to receiving the money, among them that these companies are not supposed to use the funds to buy back their own shares and also that if they are using them to open plants, there has to be child care available for employees. Listen to what Secretary Raimondo had to say.

GINA RAIMONDO: So as part of the application and before any company receives any of this money, they have to show us and have approved a workforce plan. And as part of that, we want to see how they plan to provide affordable child care, or not so much that they would provide it, but that it would be accessible and available to people that are building the facility, construction workers, as well as people who work in the facility.

And the reason for that is, quite simply, we're in a tight labor market, that there's a historically low unemployment rate, particularly in the construction field. Each one of these facilities requires 6,000 or 7,000 construction workers. The reality is it's not going to happen unless women are working on those sites and in those facilities. And that won't happen unless there's reasonable childcare.

So it's not, let me be clear, we don't want any company to do anything that's not in their best commercial interest. But we also know they won't be successful unless they have the talent to do the job. And that includes women.

JULIE HYMAN: Yeah, I mean, this is something you and I have talked about before. And it would seem to be fairly common sensical, right, that you provide or you make sure that certain measures are provided to get the qualified people in. What does affordable child care mean? What are some of the parameters you're putting around this?

GINA RAIMONDO: That will be different for every company in every geography and based upon their needs. And that's, again, that's why these are really individualized investment grants. So we are going to work with each company, tell us about the size and scale of your facility, where you want to put that facility, which suppliers do you need near you in order for this to be successful? How do you plan to work in the local labor market to attract the labor that you need to do the job?

And then in the case of child care, it just depends. Some places there's no supply of child care. It's a supply problem. In other places, it's a cost issue.

So the point here is we don't want to impose any predetermined requirements on any company. We want to work in partnership with these companies to make sure they're successful in the project.

JULIE HYMAN: And so it was interesting talking about the individualized plans they're talking about for each.

- So I think it's interesting because with a lot of these job-creating initiatives that come out, that's the piece that gets missed out, the support aspect of it, what workers actually need to be able to take advantage of these jobs. How surprising was it to hear that talked about here when we don't typically hear that?

JULIE HYMAN: It was somewhat surprising but not necessarily surprising coming from the Commerce Secretary. As you heard me say in the interview, this is an issue that she has talked about before, women in the workforce, providing support through child care. And, again, it would seem to be a pretty clear business imperative, that businesses have incentives to do this. And yet they so frequently don't. So it is interesting here.

And what is different is seeing the administration sort of push its agenda because it has this big carrot to offer, right, in the form of funding for the CHIPS Act in order to try to get this through. Now, will that then also incentivize companies that are not receiving the funding if they see that it is a successful way, for example, for companies to recruit workers? Maybe. I imagine that that's part of the hope as well, that in a difficult-- what is still a difficult labor environment for employers to attract workers, it's not just about offering them more money. It's about the broader support that they can offer them as well. So it looks like that's what the administration is trying to do here.

- And she did seem to preaddress some of the pushback, that some companies might say they can't afford it. And she did really stress that this isn't about a hardship for companies, that it is sort of a case-by-case basis as to what some of these companies can afford and the supply issues as well.

JULIE HYMAN: Right, well and to be clear--

- Do you think there's going to be much pushback?

JULIE HYMAN: To be clear, and just because I think it can be a little misunderstood here, they are not requiring the companies to pay for it, right? The companies themselves do not have to provide the child care. But if the plant is being built in a remote area, for example, they have to ensure that affordable child care is available.

Now, in some cases, will that end up being that they are going to have to provide some of the financial support, for example? Perhaps. But that's not explicitly what they are stipulating in these plans, so just to be clear there. But yes, it definitely, it felt like there is a little bit of pushback, perhaps, anticipated.

Listen, you could say, devil's advocate for a moment, if you want to be able to buy back your shares with this money, if you want to not have to do this with child care, you don't apply for the funds, right? So I think it's interesting just because it's the federal government. If I'm any private investor and I'm investing in a company, can I say, listen, these are the strings with which my money comes attached, right? I think that that is something that happens. But because it is the administration, there are other connotations here. So we'll see what kind of pushback it gets.

- And that's there, that distinction. That is a different lens that we do view when it is something coming from the federal government versus, say, a publicly traded company. So definitely worth keeping in mind. Julie Hyman, thank you so much for that interview.