An Industrial Policy Without Worker Protections

The domestic manufacturing bill was meant to be the new frontier of bringing good jobs to America. But workers became an afterthought.

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Congress’s domestic manufacturing bill once seemed to have something for everyone. When it passed the Senate last year, the bipartisan U.S. Innovation and Competition Act (USICA), and its COMPETES counterpart in the House, included provisions aimed at large and midsize firms, heavy industry and the service sector, sanctions, climate change, and strategic competition.

Since then, USICA has been whittled down to a $52 billion subsidy for chip manufacturing, and then boosted with additional investments in science. It’s still a massive bill, spending $280 billion on building semiconductor facilities, advanced research in fields like robotics, university technology centers, and K-12 programs and scholarship support for STEM students. It even reauthorizes NASA and facilitates new moon landings. (About $79 billion is new spending over the next ten years; the rest was previously authorized.)

But in a telling sign about new American industrial policy, the administration’s signature effort to revive domestic competition was stripped of worker protections.

The semiconductor facility subsidies once contained project labor agreement provisions, guaranteeing that workers on projects receiving federal funding were paid prevailing wages. And it included clauses requiring firms taking subsidies to remain neutral in union organizing efforts. Those guardrails would have come on top of significant investments in manufacturing jobs.

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But all of those measures were taken out of the final version. Intel can build fabs in America, receive investment tax credits and direct public-subsidy grants to do so, and still undercut workers on wages and fight unionization in those facilities.

This is not hypothetical, as Sen. Bernie Sanders (I-VT) expressed in a floor speech before the bill passed. “If this legislation goes into effect, will Intel and the others commit today that they will stay neutral in any union organizing campaign like the one being waged at Intel’s microchip plant in Hillsboro, Oregon?” Sanders asked.

Assuring the quality of jobs in emerging green industries, like solar manufacturing, is a long-standing priority of groups looking to build labor support for environmental policy. A key critique of President Obama’s infrastructure spending in the American Recovery and Reinvestment Act of 2009 was that its green jobs weren’t actually good jobs. The now-dead provisions on prevailing wages and union neutrality were intended to avoid repeating that mistake.

A union-backed supply chain resilience provision for domestic production of critical goods was also axed. And a program for workers who have lost their jobs due to globalization and offshoring was dropped. The Trade Adjustment Assistance (TAA) program, which funds job retraining for displaced workers, lapsed at the start of this month, after other parts of it expired last December. Since then, some 4,500 workers have missed out on its benefits, the Department of Labor estimates. Annually, the program helps roughly 100,000 workers.

TAA was part of a contentious trade chapter that had wildly different approaches in the House and Senate versions of the bill. As many labor and trade advocates feared, Congress ultimately decided to eliminate that chapter entirely rather than work out the differences.

Now, there’s no clear path to funding TAA. The program is something of a legislative orphan—it would be hard to add into appropriations, and there is no other obvious piece of legislation that could be a vehicle for funding TAA. The 60-year program goes away entirely at the end of this year. The U.S. is already one of the worst countries in the OECD on spending to upskill the workforce, and failure to save TAA would eliminate the most prominent upskilling program in the country.

Sen. Sherrod Brown (D-OH), who negotiated an extension to the TAA program last year, has argued that even the pared-down USICA will be a big win for his state, which will see a major investment in a new Intel chip factory. Brown’s office told the Prospect that he will continue to push to restore TAA and will fight Republican efforts to pair TAA with the Trade Promotion Authority, a fast-track executive authority to create more job-killing trade deals.

Chip production is highly technical work, and Intel’s new plant will create advanced manufacturing jobs. But there was an opportunity to be far more ambitious. Federal money will filter down to non-unionized companies like Elon Musk’s Tesla, where higher worker standards could have been attached to funding.

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