Biden claimed CHIPS Act would create a million construction jobs, the actual number is around 6,000

AP Photo/Evan Vucci

Earlier this month President Biden signed the CHIPS Act into law. The CHIPS Act includes about $52 billion in new spending to be delivered to the semiconductor industry in the form of manufacturing incentives and R&D money designed to spur more chip foundries in the United States. But when touting the new bill, Biden went just a bit beyond reality by claiming it would lead to more than a million new construction jobs.

Biden said the same thing when he announced the new law on August 9:

It sounds good but unfortunately it’s not remotely true. Glenn Kessler at the Washington Post asked the White House for the source of that claim. They were directed to a 2021 report by a semiconductor industry group which estimated the impact of a $50 billion investment in the industry.

When we dug into the report…we could not find any reference to 1 million construction jobs being created. Instead, the report predicted such an investment — roughly equivalent to the Chips Act — would create “an average of 185,000 temporary jobs annually throughout the U.S. economy from 2021 to 2026.”

Six times 185,000 adds up to more than 1 million. But note that these are not all construction jobs. In fact, few are construction jobs.

“The statement about 1 million construction jobs is not accurate,” said Sarah Ravi, a spokeswoman for the association. She directed us to a chart in the report that indicated that a $50 billion investment would create an additional 6,200 construction jobs.

Kessler looks at claims for various multiplier effects and induced jobs created by new hires spending their wages but there’s no way the number of construction related jobs ever gets anywhere close to a million. Eventually, the White House conceded the point.

The White House initially defended the figure but eventually conceded it was wrong. “There was a mix-up and this should have referred to the total jobs resulting from the legislation, but that doesn’t detract from the historic nature of this move to rebuild our manufacturing and supply chains here at home, and to win the competition with China in the industries of the future,” a White House official said.

Mix-up my ass. This wasn’t a mistake, it was an egregious lie which fooled a lot of people (31k liked the tweet and another 5k retweeted it). The fact that the White House has quietly admitted it had no basis in fact is buried near the bottom of this story and won’t be seen by most people. To his credit, Kessler doesn’t let the White House slide.

…there is no reason to get the number so wrong — twice. While the White House concedes a “mix-up,” the tweet has not been deleted; neither has the official transcript been corrected. The president earns Four Pinocchios.

So there you have it. The CHIPS Act seems like a good idea to me. The pandemic demonstrated that we’re too dependent on chip foundries in Taiwan. When the supply of chips gets disrupted as it has over the past couple of years, the impact can be pretty significant. But Biden’s attempt to turn this into a victory for blue collar construction workers is nonsense. The White House should be embarrassed.