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> The GlobalFoundries expansion would create up to 1,500 manufacturing jobs and 9,000 construction jobs over the next 10 years, federal officials said. So assu

• ericmay 3y ago
  But those employees also do things like buy cars and lattes, and they also pay state and local taxes, sales tax, etc. as does the foundry. There are other economic benefits too. But even if your simple calculation was correct and all there was to this story, what you’re missing in your post is that America as a nation has decided we need to produce semiconductors here for economic and national security purposes and so therefore subsidizing their manufacture is a normal thing that would occur.
  • gosub100 3y ago
    they would buy cars, lattes and pay tax on non-subsidized jobs, too. Why should the latte shop owner have to pay tax to run their business, while the chip mfg doesn't? it just creates two classes of people. > America as a nation has decided we need to produce semiconductors here for economic and national security purposes a few decades ago we decided to move manufacturing jobs overseas because paying people who had families and bought "cars and lattes" here was just too expensive. Why reneg on that commitment?
    • ericmay 3y ago
      > they would buy cars, lattes and pay tax on non-subsidized jobs, too The point here was that your assumption of the economic effects of the subsidies didn’t include other meaningful factors.
    • bee_rider 3y ago
      > a few decades ago we decided to move manufacturing jobs overseas because paying people who had families and bought "cars and lattes" here was just too expensive. Why reneg on that commitment? Because it was dumb, changing away from a path when you see it is a dead end is a good thing to do. Also I’m not sure “we” (to the extent that there even is an “we” here, there are always winners and losers with these sorts of policies so I bet the whole country didn’t agree) ever intended to move high-tech manufacturing away from the US. I think we want to outsource the bad jobs and keep the good ones. Of course it is a game everybody is playing, we’re shifting our strategy to hopefully more effectively keep the high-tech stuff.
      • octacat 3y ago
        The game the manufactures are playing is to get extra good conditions for them by pressing the government that they would produce abroad. Local manufacturing in any reasonable volume is not coming back. Highly automated - yes, maybe, if there are dotations/tax cuts/high import tariffs. Highly automated means 1.5k people working on a giant fab and rest are robots.
      • gosub100 3y ago
        why is building a washer that keeps peoples clothing clean a 'bad job' and building tech components a 'good job'?
        • bee_rider 3y ago
          Because computer chips are cool and washing machines are boring.
        • earthwalker99 3y ago
          [flagged]
      • jdewerd 3y ago
        Everyone involved with floating the dollar and running a deficit understood that it would pump the asset sector and dump the export sector. There were fights about it. Keynes got himself ejected from elite circles by lobbying a bit too hard for his pet alternative. If you want a more visible and recent datapoint, look to the perennial fights in the UN over the opposite, where a country that promised not to devalue their currency devalued their currency. Note that these discussions generally start from a point where everyone understands why it might be desirable to devalue one's currency, pumping exports & the real economy while dumping assets. This is macroeconomics 101 stuff. The surprising thing is not that high tech manufacturing left, it's that for a while it was actually able to compete with a money printer for access to talent and resources.
    • edgyquant 3y ago
      Why continue to ignore the answer given in favor of purely economic arguments? We need chips built at home so we’re making it happen, it isn’t complicated.
      • gosub100 3y ago
        "we" is doing a lot of work there. a multiple-trillion-dollar company could do the investing (since their products depend on this silicon) instead of the American taxpayer. But lets blur the lines with the word "we".
        • edgyquant 3y ago
          All of their competitors are subsidized by their governments and chips are as important as energy or agricultural today. It’s not realistic for us to expect a free market to compete with non free ones
• Nevermark 3y ago
  The point of all these breaks is to alleviate a critical dependency on two foreign advanced chip makers. Especially one that is under military threat by a huge political economic and military rival. Losing out on a big percentage of advanced chip making capacity could be catastrophic for the US economy and technological advancement. And military. This is not an "investment" in future tax revenue via jobs, although jobs are nice.
  • csomar 3y ago
    I understand the point of these subsidies. I am just doubting (a personal opinion) that they'll actually work and calculating the wealth transfer happening here.
    • KoftaBob 3y ago
      Why do you doubt they'll accomplish their goal of removing dependency on foreign chip makers?
      • phone8675309 3y ago
        Not parent poster, but there's a long track record of these sorts of subsidies to big tech companies already rolling in money to go bust with little oversight, investigation, or prosecution. The big one everyone remembers is the set of grants giving to incumbent providers to expand access to broadband (25 Mbps down/3 Mbps minimum) to everyone in the country - a promise that, despite three rounds of grants in the billions, has not materialized.[1] [1] https://www.jsonline.com/in-depth/news/2021/07/14/weve-spent-billions-provide-broadband-rural-areas-what-failed-wisconsin/7145014002/ https://www.jsonline.com/in-depth/news/2021/07/14/weve-spent...
        • bee_rider 3y ago
          Chips and telecom are pretty different markets, right? GlobalFoundries needs a leg up, most of the big telecom companies are already abusive monopolies.
      • 3y ago
• zer00eyz 3y ago
  Its not about this being a "winner" it's about being able to make the dam things domestically. Full Stop. We have national defense concerns and zero faith in intel. EDIT: This makes it "defense spending" in a civilian line item.
  • Dalewyn 3y ago
    Intel is one of the recipients/beneficiaries.[1] [1]: https://www.intel.com/content/www/us/en/corporate/usa-chipmaking/home.html https://www.intel.com/content/www/us/en/corporate/usa-chipma...
    • edgyquant 3y ago
      Yes but the point stands. “Zero faith in intel being able to fill the gap if left to its own devices,” would be a better wording
      • Dalewyn 3y ago
        TSMC, SMIC, and Samsung among others all have the financial and political will of entire countries behind them. It's unreasonable to expect anyone to fight equally if not better without similar terms like CHIPS.
• konschubert 3y ago
  This isn't about creating jobs. The US has more Jobs than people who're willing to work. This is about creating strategic independence.
  • edgyquant 3y ago
    No a big part of the chips and inflation reduction acts are definitely the creation of jobs and the bringing of manufacturing back to parts of America that has been deindustrialized due to offshoring.
    • dev_tty01 3y ago
      That is just what they say to get support from constituents who don't understand international power struggles and the strategic importance of chip production capabilities. The overarching motivation is global strategic power and security. Read Chip War: The Fight for the World's Most Critical Technology.
    • patmorgan23 3y ago
      While policies can have multiple goals, the primary goal of the CHIPS Act is definitely supply chain independence for the US Military, Job creation is a nice side effect.
• formerly_proven 3y ago
  The value of a job for the state is limited to ... federal income tax? That's certainly a view to hold.
• myrmidon 3y ago
  It's always good to question subsidies like this, but the question you ask ("does income tax on the created jobs pay for the subsidies") is the wrong one: The state is not investing into this for a monetary return from income taxes-- he is paying for strategical reasons/supply chain security, and the "price" is to compensate for the fact that labor costs and regulations make building chip foundries in the US more expensive. So what you would need to ask would be more like: Is the subsidiy higher than it needs to be to lure chipmakers into the US? And that is much harder to answer...
• zitterbewegung 3y ago
  You are absolutely right but missing the point. The CHIPS act is to make domestic foundries for companies where the manufacturing is outside of the United States. It is to make us resistant to supply chain problems and also the possibility of tampering of computer components. Foundry creation is incredibly expensive and to get to the state of the art lithography is hard but global foundries can make chips for things that don't require that. The subsidies should reflect that (Intel / TSMC have had this grant also). On the other hand they could just not complete what they promised and we would be in a bad position: https://www.theverge.com/2019/4/10/18296793/foxconn-wisconsin-location-factory-innovation-centers-technology-hub-no-news https://www.theverge.com/2019/4/10/18296793/foxconn-wisconsi... Others have said about trickle down economics (this can be debated).
• melling 3y ago
  This has nothing to do with jobs. Read Chip War by Chris Miller https://en.m.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_World's_Most_Critical_Technology https://en.m.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_...
• mattmcknight 3y ago
  In addition to the point of this not being to make money, more than half of this is loans, so is intended to be paid back. 1.5B is grants, so closer to $1M per manufacturing job in your framing. The other economic benefit is moving one part of the supply chain here may enable more of the supply chain to be completed here. For some of the hardware companies I work with, if you have to make a few parts in China, it's vastly cheaper and more flexible to do the whole assembly there.
• dubcanada 3y ago
  Is the only reason governments subsidize things for employment? Could it not just be here, have $3.1B and further us as a species by producing chips needed for AI, ML, cars, cellphones, etc. We give giant science grants all the time, tons of money for infrastructure, etc, what makes this one immediately go into X dollars / jobs created * tax generated?
• dukeyukey 3y ago
  I imagine that $2 million also includes land purchases, materials, and equipment on top of salaries.
• Shrezzing 3y ago
  Oxford Economics estimates that there's a 6.7x multiplier on each new role created in the semiconductor industry[1]. That is, each role in the semiconductor industry supports an additional 5.7 jobs indirectly in other domestic industries. The only two sectors that are higher are Computer Storage manufacturing and Aircraft Manufacturing. You'd need to split the pay between all 6.7 newly created roles, meaning they only need ~$60k take-home or so each - which is right around the US mean salary. [1] https://www.oxfordeconomics.com/resource/chipping-in-the-us-semiconductor-industry-workforce-and-how-federal-incentives-will-increase-domestic-jobs/ https://www.oxfordeconomics.com/resource/chipping-in-the-us-...
  • oldpersonintx 3y ago
    [dead]
• lulznews 3y ago
  It’s a money dump no question about it. America simply can’t do these things.
  • deleted 3y ago
    [deleted]
• BeetleB 3y ago
  At $344K/year, I can assure you the federal income tax will be higher! Also, did you not account for capital costs? I know that at Intel fabs, labor costs are significantly lower than capital costs. Consider, for example, that ASML charges $0.5B for a single unit.
• tqi 3y ago
  National security considerations and second order economic stimulus effects aside, rounding 9000 construction jobs down to 0 is also doing a lot of work here. If you assume the average duration of those jobs is just 5 years, that doubles the number of job-years...
• woah 3y ago
  Don't you think they have to pay for the machines?
• patmorgan23 3y ago
  The government is not a business, it's "investments" do not have to "break-even" in raw financial terms. Maintaining supply chain diversity is critical for national security. The US Military does not want to be dependent on foreign manufacturers for its equipment. Furthermore the business and employees will be paying sales and property taxes, in addition to federal income tax, and will have 2nd & 3rd order effects from their spending.
• imgabe 3y ago
  The 9,000 construction jobs will also pay taxes while they're working for 2-3 years. The 1,500 people will buy houses and go to restaurants and dry cleaners and have lawn care and create much other economic activity that will also generate tax revenue. Simply diving the subsidy by the 1,500 permanent employees doesn't capture the value that's created, along with the strategic value of bringing more chip manufacturing to the US.
• dangus 3y ago
  But the jobs aren't the only nor primary benefit. Don't forget that TSMC was essentially a government enterprise when it started. Be cynical if you want, but the one thing that has a 0% track record of effective results is calling every government function wasteful, corrupt, and untrustworthy and responding by dismantling government institutions and investments.