The primary outcome of occupational licensing restrictions is to restrict entry into a profession to a few chosen practitioners, usually only after approval from a licensing board and extensive training requirements.
The effects of restricting the supply of practitioners are familiar, but an underappreciated (and perhaps more harmful in the long-run) effect of licensing requirements is the ability of licensing boards to prevent innovation by keeping regulations related to the practice of the profession in place, no matter how outdated. In Capitalism and Freedom, Milton Friedman cited the American Medical Association’s opposition to group medicine and prepaid medical plans.
Flash forward 50 years, we see how regulations imposed on licensed hearing aid specialists in Florida keep the industry in the 1970s. Timothy Snowball of the Pacific Legal Foundation tells the story of one licensed hearing aid specialist who’s fighting against over-regulation in The Hill.
Florida says no one but licensed “hearing aid specialists” can sell a hearing aid, and the licensed hearing aid sellers are required by law to perform antiquated hearing exams — tests that may have been state-of-the-art in the 1970s when the law was passed, but are, in many cases, unnecessary today.
Modern hearing aids contain sophisticated software that allows almost anyone to effectively select the right hearing aid, and at lower cost, using common tools such as personal computers and smartphones.
Dan Taylor, a licensed specialist with a 30-year career in the industry, is taking a stand against these rules with the help of Pacific Legal Foundation.
Dan’s practice is based on these next-generation hearing aids. So he recently gave up his license, on the grounds Florida’s rules are unnecessary, and that federal law preempts the state’s licensing regulations. And he’s right— federal regulations establishing “conditions of sale” for hearing aids expressly preempt state rules that tack on additional or different conditions of sale.
Nonetheless, he soon received a cease and desist letter and a fine, which he paid. And though Mr. Taylor is preparing for semi-retirement, he wants to continue his life’s work helping people hear better, including his charitable work. So he’s teamed up with PLF to fight Florida’s rules.
The suit, which lists the members of the Florida Board of Hearing Aid Specialists as the defendants, is interesting in that it is in part based on federal preemption. Hearing aid devices are regulated by the Food and Drug Administration, making the additional regulations imposed a violation of the Supremacy Clause of the U.S. Constitution. (There is also an interesting antitrust argument to be made against occupational licensing restrictions, which have generally been shielded by state action immunity from antitrust laws).
Taylor himself deserves some praise for his courageous act of economic civil disobedience. Hopefully Taylor and PLF will prevail against a regulation that is not only burdensome but woefully outdated.
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