It’s a tough time to be a restauranteur, said Uncle Jack’s Steakhouse CEO, Willie Degel, who joined the FOX Business Network’s Mornings with Maria to discuss the impact of government regulation on businesses across the country.
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Degel said his business is facing serious headwinds from stifling federal regulation, particularly in the form of labor cost increases and greater scrutiny from the Department of Health.
“The Department of Health has become like the FBI, like a tax nation, bureaucratic agency that they come to us and no matter what they got to fine us… It’s all a system now. So we are employing so many people, everybody saw those numbers, so now they are looking at us to try and make fees. I just think local city state and government is trying to employ too many people when it should be empowering, people like me. Entrepreneurs should be employing people,” he said.
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Degel continued, “administratively it’s a high cost. It’s a lot of work. You have to have your paperwork in order or you’re going to get trouble. You’re going to get fines, you’re going to get lawsuits. So it one thing is out of order, you’re responsibility for a federal lawsuit that can go back 6 years… You’ve got to be on it every minute.”
The former Food Network star criticized President Obama for setting a nation-wide example by implementing more regulations at the federal level.
"When Obama came in, it's no different than solar energy. It all trickled down."
“When Obama came in, it’s no different than solar energy. It all trickled down. If you believed in his beliefs than locally you implemented it quicker and faster,” he said. “I’m building a restaurant in Astoria, Queens… The cement floor in the basement where I’m going to have walk in boxes and ice machines has to have an “R” energy rating of 10 to 12. So we have to put in extra concrete, extra insulation in the dirt.”
In Degel’s opinion, it’s the consumer who ultimately suffers from higher operating costs.
“If you look at everybody’s ideology... They are like ‘oh the customer will slowly pay.’ But how fast can I keep raising the [the price of steaks]?… Meat’s expensive so how much can I transfer to the customer? So I even try tweaking my bread. People complain,” he said.
According to Degel, his steakhouse which employs over 300 people, is also feeling the burn from minimum wage increases.
“This year, the minimum wage for front of the house staff, which is 75% of employees – we were paying them $5 an hour. They said we have to give them $7.50. I had a front waiter, a back waiter [and] a busboy for every 5 tables. I cut the busboy position this year—and that only saved 30% of the increases of the $350,000 it was going to cost me. So I’m eating that right now,” he said.