The Wendy’s Co (WEN), Wal-Mart Stores, Inc. (WMT) & The Coming Obamacare Unemployment Surge

But the more likely answer is that business owners simply don’t know if the risk-reward ratio works in their favor regardless of which way they go. The WSJ poll found almost half of those surveyed aren’t sure if it’s going to cost them more or not if they provide coverage than if they take the penalty.

The vanishing U.S. worker
I anticipate we’ll actually see a spike in layoffs coming in the next few months as companies right around 50 full-time employees decide it’s just easier to avoid the equation altogether and get their employee rolls under the threshold. Businesses have the choice of calculating their head counts either by averaging their workforce over the full 12 months of 2013, or during any consecutive six-month period over the course of the year. Getting under the threshold could be an important cost savings for many small businesses. Either layoffs or switching employees to part-time status will be the norm.

It’s no small coincidence that businesses added fewer jobs in March than at any time in the past year.

Yet while many of the largest employers like Wal-Mart Stores, Inc. (NYSE:WMT) can easily absorb the costs, others like Whole Foods Market, Inc. (NASDAQ:WFM) — which employs more than 60,000 people and already provides health care coverage for workers with more than 30 hours work per week — is left to reconsider its full-time staffing levels because of the law. Whole Foods Market, Inc. (NASDAQ:WFM) spends more than $200 million annually on employee health care costs, and the mandate will only serve to drive them higher. As a result, CEO John Mackey has said that his employees can inevitably expect to be paid less because the money has to come from somewhere, and that ultimately will be in fewer hours worked or less money earned per hour.

Unemployment today only seems low because the number of people who’ve dropped out of the labor market altogether is at its highest levels since Jimmy Carter was president. We’re already losing jobs because of the medical device tax, and we’ll see the jobs market worsen as even more individuals vanish from the employment statistics as Obamacare causes jobs at the periphery to evaporate.

The article The Coming Obamacare Unemployment Surge originally appeared on is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Whole Foods Market. The Motley Fool owns shares of Whole Foods Market.

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