Jacquelyn Martin/AP Photo
President Joe Biden listens to Intel CEO Pat Gelsinger, left, as factory manager Hugh Green watches during a tour of the Intel Ocotillo Campus, in Chandler, Arizona, March 20, 2024.
The past month marked the second anniversary of a pair of historic federal industrial-policy bills: The Inflation Reduction Act and the CHIPS and Science Act. The latter is an unprecedented bipartisan spending package, subsidizing the domestic production of semiconductors to combat American supply chain vulnerabilities and China’s manufacturing dominance. It’s a linchpin of the Biden-Harris administration’s attempts to revive American industrial policy and spur the creation of good-paying domestic manufacturing jobs.
Despite the announcements that they would receive billions in public investments and tax credits, however, industry giants like Intel are defying Department of Commerce guidelines on worker safety and worker rights. Semiconductor operators are sounding the alarm on unsafe working conditions, low wages, union busting, and microchip industry practices that leave workers unpaid for weeks at a time.
In June, workers at an Analog Devices, Inc. (ADI) fab in Beaverton, Oregon, held a march on the boss, delivering a petition that outlined a series of workplace safety and job quality concerns. The march was the first public worker protest since the passage of the CHIPS Act in an industry famous for its staunch opposition to unions.
For semiconductor operator Ben Coffey, a manufacturing job in a booming industry seemed like a promising path to a stable living. But even with the influx of government funds, Coffey says, “there’s a misconception among our elected officials that these are good jobs.
“It is a booming industry, but we’re still at the same position we were at before [the CHIPS Act]. Employees are still struggling. There is no trickle-down that’s happening,” he adds.
Coffey, who processes hundreds of silicon wafer cassettes a day, said workers are reaching out to elected officials in Oregon because companies like his employer, which secured $12 million to expand its worksite via Oregon’s own version of the CHIPS Act, should be held to a higher standard when receiving public funds.
Unlike some other recent legislation, the CHIPS Act does not explicitly require funding recipients to stay neutral in union organizing efforts, nor does it completely prohibit companies from inflating corporate payouts on the public dime. According to a report by the American Economic Liberties Project, nine of the ten top domestic chip manufacturers devoted $239 billion from 2019 through 2024 to dividends and stock buybacks—a pattern of rewarding shareholders that doesn’t suggest that all the public funds they receive through the CHIPS Act will necessarily be devoted to research, development, and manufacturing.
Chips fabrication is a labor- and resource-intensive process that requires workers, like ADI operator Robbie Garecht, to suit up in head-to-toe “bunny suits” to perform chemical changes with corrosive solvents. “If you sneeze, you can lose a limb,” Garecht says. Semiconductor operators may work in “clean rooms,” but the industry doesn’t have the cleanest record when it comes to worker protections. Grave health hazards aren’t the only concerns taking center stage for ADI operators: There’s also a grab bag of industry standard cost-cutting practices that manufacturers use to discipline labor.
It is undeniable that the Commerce Department’s failure to carry out the Biden-Harris vision for the CHIPS Act has left workers in the lurch.
After ADI workers met a major production deadline, the company proceeded to furlough them, thereby depriving them of benefits. To be sure, ADI talks a good game. In 2022, the company identified “salient human rights risks” in their manufacturing operations, promising to heed the right to “a living wage and humane treatment in the workplace,” and even “freedom from slavery,” a nice touch if nearly 160 years behind the Constitution’s 13th Amendment. When asked how the company plans to address specific worker demands and whether it will stay neutral in the event workers decide to unionize, ADI couldn’t muster a direct response—merely telling the Prospect they support their employees’ “right to express views on critical matters.”
Just a stone’s throw from ADI’s plant, major semiconductor manufacturer Microchip Technology planned to furlough employees at its Gresham, Oregon, facility. The furloughs came shortly after the Department of Commerce announced a preliminary memorandum of terms (PMT) for a $162 million award to Microchip, followed by a due diligence phase. The purpose of this application phase is to ensure manufacturers like Microchip and Intel adhere to high-road labor standards—but eight months in, Microchip has shown nothing but complete disregard for these established terms of engagement.
In an audio clip obtained by the Prospect from a worker town hall at Microchip Fab 4 held on July 23rd, Vice President Dan Malinaric launched into an anti-union tirade, telling workers the company dislikes unions and claiming unionized workers sign away the ability to represent themselves to the detriment of their interests.
Malinaric went on to say “we believe the semiconductor industry, and Microchip in particular, are more responsive to employees and more competitive without [unions].” These are classic talking points, straight out of the union-busting playbook. Telling workers they’d be less able to speak persuasively with management if they had a union, labor lawyer Seth Goldstein says, has been ruled to be an unfair labor practice, in violation of the terms of the National Labor Relations Act.
The problem facing chip fabricators is that the Commerce Department has taken zero steps to hold companies like Intel and Microchip to its own Good Jobs Principles, even though Commerce Secretary (and former venture capitalist) Gina Raimondo met with the Congressional Labor Caucus to discuss industry accountability on July 24th, just one day after Microchip’s VP urged his workers not to go union.
Despite initially having high hopes, deputy director of Jobs to Move America Miranda Nelson expresses frustration with Commerce’s rollout of the CHIPS policy: “I’m just concerned they’re dropping the ball.” The funding notice initially implied that Commerce’s priorities would be binding, but that hasn’t been the case. In every step of the application process, the CHIPS Program Office’s feedback and guardrails on worker rights have served as little more than mild suggestions that the grant-receiving companies have ignored.
IUE-CWA—the industrial division of the Communications Workers of America—has negotiated some unprecedented community benefits and labor peace agreements in the tech and electronics industries, overcoming considerable pushback. However, IUE-CWA’s agreements with standout actors like Akash Systems are exceptions to the industry’s anti-union rule.
IUE-CWA President Carl Kennebrew emphasizes that “unless the Department of Commerce does more, the quality of these jobs simply will not live up to the promises being made.” The union wants to see stringent, transparent labor standards and meaningful penalties when funding recipients violate their contractual obligations to workers.
Although it’s too early for a postmortem on those industrial-policy programs administered by the Commerce Department, it is undeniable that the department’s failure to carry out the Biden-Harris vision for the CHIPS Act has left workers in the lurch. The same cannot be said of other Cabinet departments, such as Labor and Transportation, which have actively enforced the pro-worker requirements in the bills Biden has signed into law.
But if Raimondo’s department is left to its own devices, the CHIPS Act may go down as a missed opportunity, falling far short of the transformative pro-worker program of the New Deal. If the Biden presidency is to go down in history as a scaled-down second coming of Franklin Roosevelt’s, the whole of federal government—Commerce included—must take a more active role in ensuring that public investments in manufacturing benefit all Americans, not just major shareholders and the corporate elite.
