New Industrial Policy

Federal investment could create lots of good manufacturing jobs, but funding gaps remain.

The Biden administration’s CHIPS workforce play is coming into focus. Will federal funding match the ambition? Also, apprenticeships in the electronics industry, Baton Rouge seeks to curb brain drain, and new data shows little progress in opening up careers to jobseekers without four-year degrees.

Workforce Funding for Manufacturing Jobs

More details are emerging about the federal government’s investment in job training for the semiconductor industry, with new specifics about the workforce development pieces of the $53B CHIPS and Science Act.

While it remains unclear how much money will flow toward those programs, the funding likely will rival the amount spent on the nation’s primary workforce training system. That means billions of dollars for semiconductor education and training, much of it offered by community colleges and universities.

What’s New: The White House last week announced plans to roll out $5B for semiconductor-related R&D and workforce needs in the next two months. The investment will go to the new National Semiconductor Technology Center, which the administration has now formally established as a public-private consortium, to encourage strong industry participation.

To double the U.S. semiconductor workforce, the center will seek to scale up education and training programs with a solid track record, while trying new approaches, including those aimed at underserved communities. The Biden administration said it plans to invest “at least hundreds of millions of dollars” in those workforce efforts.

The center will include a focus on job quality.

“As we create opportunities for good-paying jobs, the workforce initiatives, such as the NSTC Workforce Center of Excellence, will help ensure a diverse, skilled, and prepared workforce across the nation,” said Gina Raimondo, the U.S. secretary of commerce.

Semiconductor companies in some cases have committed to ensuring that many of the new jobs go to graduates of community colleges. Intel, for example, has said that two-thirds of 7K hires for its new manufacturing facilities in Ohio and Arizona will not need bachelor’s degrees.

Yet some four-year universities appear poised to play a big role as well. For example, Arizona State University has been an eager partner for Intel and the Taiwan Semiconductor Manufacturing Company, which is spending $40B to build two fabs in Arizona. 

ASU recently created a hub of coursework for careers in microelectronics. The university also has dramatically expanded its engineering program while setting up two new schools to focus on advanced manufacturing and integrated engineering, reports The Washington Post’s Jeanne Whalen.

Yet the pace of semiconductor workforce development in Arizona’s Maricopa County remains a challenge—TSMC has pushed back its timelines for the two facilities, citing a lack of skilled workers and higher costs. And as Bloomberg News recently reported, another factor is that the Biden administration has yet to hand out any of the planned grants to major chip makers, including TSMC and Intel.

Jobs Where They’re Needed Most: The CHIPS spending is part of a broader set of federal investments in strategically important industries, including clean energy, biomanufacturing, and heavy industry as well as semiconductors and electronics. 

The money from the feds comes alongside a $525B surge of private spending in those industries, researchers write in a new report from the Brookings Institution. Those funds are poised to benefit “employment-distressed counties,” which are receiving a larger proportional share of the spike in investments. For example, they point to a $1.3B lithium-processing facility the Albemarle Corporation is building in Chester County, South Carolina. That operation is expected to create at least 300 new jobs.

“The tremendous scale required to manufacture electric vehicles, batteries, and semiconductors likely means that companies are seeking the plentiful land and build-ready sites available in many micropolitan regions,” they write, “with the assumption that they can draw on a larger workforce living in nearby metropolitan areas.”

Likewise, the CHIPS and Science Act funding could be a boon for the Rust Belt, by helping the region transition from “signature smoky industries” to a new, tech-driven model of manufacturing, two Brookings fellows write in a separate brief. They point to the Midwest’s 11 tech hubs, including one focused on medical technology in Minnesota.

Yet both reports note that Congress has not adequately funded the tech hubs or other place-based federal programs designed to boost public-private partnerships and inclusive economic growth.

As a result, it’s unclear if the full Midwestern transition will happen, conclude John C. Austin and Mark Muro, both senior fellows with Brookings Metro.

The Kicker: “Technology-based economic development remains a challenging pathway for any region, let alone one with a tough history of deindustrialization and brain drain. There are no guarantees for anyone,” they write.

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Good Jobs Beyond Computer Chips

IPC, an industry association representing more than 3K electronics manufacturers, hopes the CHIPS investments will raise the profile of jobs across the industry.

“The reality is that people will work in the electronics industry, not just the semiconductor industry,” says Richard Cappetto, senior director for North American government relations for the group.

IPC worked with the U.S. Department of Labor to set national program standards for apprenticeships in electronics manufacturing—a first for the industry. The standards will make it easier for companies of all sizes to launch registered apprenticeship programs, a move designed to help develop the workforce needed to make good on CHIPS money and market demand. 

The group has partnered with the Institute for American Apprenticeships to provide grants of $375 per apprentice for employers starting new programs, while another grant program will provide full reimbursement for the cost of technical training for a limited number of employers. Zentech Manufacturing, a military electronics manufacturer located in Baltimore, is among the early adopters.

IPC also is working with high schools in three states—Colorado, Massachusetts, and Texas—to provide the technical instruction students would need to graduate and be ready to do the work-based portion of the apprenticeship. In its pilot phase, the program is serving about 200 students.

The ultimate goal is to make apprenticeships possible for more small and midsize manufacturers by handing them a quality, ready-made framework that complies with all the federal rules and regulations. “We’ve already done all the hard work there,” says Cory Blaylock, director of workforce partnerships at IPC. “This is just about being able to implement.”

Apprentices who complete will be ready to work as electronics assemblers or printed circuit board fabricators, both high-demand roles that don’t require college degrees. IPC hasn’t set participation goals, but they are planning for substantial growth.

“We know what the need is, so ideally we would love to have employers in all 50 states,” Blaylock says. “I want it to be big.”

Blaylock previously developed the apprenticeship program at the Lockheed Martin location in Lufkin, Texas, which served 168 apprentices over four years. And she herself took advantage of apprenticeship—training to be a career development technician—when she moved from being a classroom teacher to working in the electronics industry about a decade ago.

“I saw the value and the benefit of the apprenticeship I participated in,” Blaylock says. —By Elyse Ashburn

Degree Requirements and Skills-Based Hiring

New data backs a consensus that the removal of degree requirements in hiring so far has failed to open up careers to substantially more jobseekers.

Researchers from the Burning Glass Institute and Harvard Business School’s Managing the Future of Work initiative analyzed a sample of more than 11K job postings for roles at large firms that dropped four-year degree requirements. On average, they found that those employers increased the share of workers without a bachelor’s who were hired into those roles by about 3.5 percentage points.

That shift applied only to the 3.6% of roles that dropped a requirement during the time studied, meaning that the net effect is a change of only 0.14% in incremental hiring of job candidates without four-year degrees. As a result, the report concludes that fewer than one in 700 hires last year reflected promises by employers to drop degree requirements. 

The new report confirms our failure to find evidence that employers in Texas are hiring more workers with short-term credentials for roles that traditionally required degrees.

Even if companies want to move beyond relying so heavily on four-year degrees, they tend to lack alternative systems for evaluating what job candidates know and can do. Such a shift toward skills-based hiring is limited by most HR tech’s inability to accept digital credentials or to gather solid skills data.

“Market leaders like Bank of America, Amazon, Oracle, Lockheed Martin, Kroger, and Stellantis have struggled to follow through on sincere public pronouncements,” finds the report, demonstrating that “skills-based hiring requires both deep commitment across the organization and a concrete plan for tactical action.”

Progress is unlikely in the next couple years, Joseph Fuller, who co-leads Harvard’s Managing the Future of Work project, recently predicted. But Fuller was more bullish on real change happening in 5-10 years, because he thinks AI will create data to pave the way for skills-based hiring.

Open Tabs

AI and Jobs
Higher education’s STEM focus will need to be reconsidered due to AI’s impacts and signals that people skills may be more durable than technical and data skills, JFF’s Maria Flynn and LinkedIn’s Aneesh Raman write in The New York Times. Meanwhile, a Microsoft Super Bowl ad framed AI as a catalyst for people to make progress with their education and careers, rather than a scary unknown novelty, Scott Rosenberg reports for Axios.

AI and Colleges
The top goals of AI-related strategic planning by colleges and universities are preparing students for the future workforce, exploring new methods of teaching and learning, and improving higher ed for the greater good, according to a landscape study conducted by Educause. The nonprofit association also published a case study on how and why the University of Michigan built its own closed generative AI tools.

AI and the South
The Southern Regional Education Board Commission will create a commission on AI and education. Led by Henry McMaster, the Republican governor of South Carolina, and Brad D. Smith, president of Marshall University, the commission will include education and business leaders from SREB’s 16 states. They will explore how AI is used in classrooms and how to prepare a workforce that is being transformed by technology.

Jobs and Enrollment
Work was the most common reason students cited for no longer enrolling at a community college, according to a survey of “stop-out” students conducted by New America. Affordability, motivation, and childcare were other top reasons. Compared to the results of a similar survey last year, formerly enrolled students were more likely to report hardships, with 60% saying they had fallen behind on paying important bills.

ROI Data
Policies that link federal aid eligibility to graduates’ earnings tend to measure the earnings of only students who complete a credential, ignoring those who drop out, write the Urban Institute's Jason Delisle and Jason Cohn. Median annual earnings of noncompleters at for-profit colleges lag those of graduates by $17K, their analysis found. The gap was $8K (about 20%) among students who attended community colleges.

Workforce Education
Ohio’s Department of Education and Workforce replaced its previous education department last year as part of a Republican-backed overhaul of the state’s K-12 system. Career preparation will be a top priority for the department, its new director, Steve Dackin, said in an interview with Patrick O’Donnell of The 74. Students need more access to career exploration, he said, as well as to labor market data about careers and wages.

Work Shift is firing up a podcast soon. The Cusp will feature interviews with plugged-in experts about the impacts of AI and other forces in the fast-changing education+work space. The plan is to elevate the voices of experts who know what’s actually happening out there. Send me your ideas about interviews and what to cover? —PF