CHIPS and Science Act Aims to Build a Workforce Alongside Microchips, but Funding Is Short

New Brookings Institution research argues that the law is the most significant workforce legislation in the last 15 to 20 years—though training dollars have been less than planned.

The CHIPS and Science Act, known for its intent to revive the U.S. semiconductor industry, also is the most significant new workforce law in the last 15 to 20 years—but spending on education and training is falling short of what the law intended.

Those are the top line findings from a new brief from the Brookings Institution.

The big idea: The act authorizes about $2.6B annually in STEM education and workforce funds through the National Science Foundation alone, or about $13B over five years, and potentially far more as part of larger innovation and manufacturing packages overseen by the U.S. Department of Commerce and other agencies.

If fully funded—which it has not been thus far—CHIPS and Science would rival the nation’s primary workforce programs operating under the Workforce Innovation and Opportunity Act, at about $3.2B in annual spending.

“What makes it so important is not just its size, but its orientation to core workforce training needs in the highest value economy,” say the report’s authors, Martha Ross and Mark Muro, both senior fellows at Brookings Metro. “And it incorporates truly modern ideas about how policy should be set up.”

The details: While the CHIPS and Science Act targets advanced technologies, the jobs it stands to create run the gamut from PhD engineers to technician roles that don’t require a bachelor’s degree.

  • In the semiconductor industry alone, the law could create 115K new jobs by 2030—but under current training and hiring trends, about 67K would go unfilled, according to research from the Semiconductor Industry Association.
  • About 39% of those unfilled jobs would be for technicians with associate degrees or certificates.

Closing that gap in the semiconductor industry and other cutting-edge fields, like artificial intelligence, biotech, and clean energy, is a major focus of the CHIPS and Science Act.

Muro particularly likes the law’s focus on place-based investments, which are designed to create regional expertise and good jobs beyond the superstar cities. Ross and Muro also point to major experiments with experiential learning, investments in skills development for learners who aren’t pursuing a bachelor’s, and the focus on integrating economic and workforce development.

They both see CHIPS and Science as a more critical piece of legislation for workforce development than the last major change to the Workforce Innovation and Opportunity Act or current proposals to update that law.

“We’re finally addressing the need for workforce development revitalization through the CHIPS and Science Act,” they say.

The feds’ take: The Commerce Department also is bullish on the law’s emphasis on seeding local ecosystems and on integrating workforce and economic development. And it is heavily focused on magnifying the impact of federal investments through state and local matching.

Making Good on Potential

Dollars and sense: The act provides for education and workforce development across 33 different programs and under two different divisions, the first focused solely on the semiconductor industry and the second focused on research and innovation—the “and science” part of the law—across a much wider range of advanced industries. 

  • Ross and Muro were able to track authorizations totalling $2.8B for specific education and training programs over five years, and language allotting billions more for that work more generally.
    • Some of those broader investments, such as the $13B for STEM education and workforce activities at the NSF, have a set budget. Others are simply mentioned as work streams within larger initiatives.

    The Commerce Department, for example, expects that many of the $39B in incentive awards for companies to expand or build new semiconductor manufacturing facilities will include a workforce development component. And the National Semiconductor Technology Center the department plans to build through a public-private partnership would include a heavy focus on the R&D of workforce.

    Funding limbo: That said, longer-term funding remains a question mark. And even immediate appropriations for workforce activities are falling short of what the CHIPS and Science Act intended.

    • STEM education activities at the NSF fell $600M short of their $1.4B authorized level in fiscal year 2023. And they are $1.1B short in the current budget request—with the appropriations in the current U.S. House and Senate bills coming in even lower.

    Other investments that include a significant focus on training and workforce development have also come up short.

    • Funds for two key manufacturing development programs—the Manufacturing Extension Partnership and Manufacturing USA—have come in 32% and 47% below their authorized levels, respectively.
    • And the signature Tech Hubs program received just $500M in fiscal year 2023, one-quarter of its authorized level for the year. 

    Muro and Ross see little chance that Congress will make up the shortfalls in future years. After all, the Republican leadership in the House is yet again scrambling to come up with a plan that will just keep current government operations funded amid opposition from far-right members of the caucus.

    State level: State governments have been making significant investments of their own that may help fill in some of the gap. In New York, for example, Gov. Kathy Hochul just proposed a network of four new workforce development centers offering advanced manufacturing training and credentials in Syracuse and other upstate locations

    Ross also says that states should be working now to strengthen work-based learning and nontraditional pathways into STEM careers. 

    That will require building capacity in state apprenticeship offices, K-12 systems, community colleges, and regional public universities, she says. States can also support industry-led initiatives, like the U.S. Chamber of Commerce’s Talent Pipeline Management effort, that are designed to better connect employers and education providers.

    Parting thought: “The national security, industrial, and economic development goals of the CHIPS push will not be achievable without a major surge of STEM and tech talent development,” Ross and Muro say. “And so the workforce components of the bill are not just supplementary—they’re central and crucial.”

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