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Economic Picture Is Getting Ugly

Tickers in this article: PZZA DRI
NEW YORK ( TheStreet) -- It appears to be getting a bit ugly out there, with the S&P 500 down 5.2% since Election Day. The markets have a lot to grapple with these days, the fiscal cliff and more of the same story in Europe.

The employment picture does not appear to be getting any brighter, and with the reality that the Affordable Care Act will be fully implemented, we are hearing of more companies either laying off workers, or pushing them to part-time status in order to avoid covering health employee's health insurance.

Frankly, I believe that there will be a deal to avoid the fiscal cliff. As much as I'd just hope that it's not another temporary fix which will breed more uncertainty, the reality is, if anything does get done, there's simply not enough time to make it anything but temporary. Washington has a lot of work to do in a short period of time -- just 6 weeks -- encompassing Thanksgiving and Christmas, so if a deal does get done, there won't be a great deal of thought behind it. What else is new?

Frankly, the implementation of the "Affordable" Care Act may be even more frightening. Regardless of your political views, most would agree that this monster piece of legislation was rammed through Congress, with enough promises made to get the necessary votes.

Just getting it passed was nirvana to those pushing for health care reform, but the implementation of most of it was so far out that little rational thought went into it. Now reality is setting in, and I for one am frightened of what this legislation will do to the employment picture.

Again, this is not intended to be a political narrative. There are strong feelings on both sides of the health care debate. However, any legislation that deters companies from hiring workers, or encourages them to shift fulltime headcount to part-time, was not very well thought-out in the first place. Employers offer benefits to employees, and when the economy is growing, and labor markets are tight, companies use benefits to attract employees.

The labor market is far from tight at this point, in fact, it's in shambles. This is the worst time to try and force companies to pay up. The loopholes in the law will just force them to shift workers to part-time status, lay employees off, or just not hire. That's no way to get a weak economy growing again. But we are stuck with this.

In October, Darden Restaurants (DRI) announced that it is no longer offering full-time hours to many hourly employees. In order to avoid providing "affordable" health insurance to employees, required for those working at least 30 hours per week, Darden will be scheduling employees for 28 hours per week.