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When you suffer a severe injury due to someone else’s negligence, the consequences extend far beyond the immediate physical pain and medical bills. Catastrophic harm can derail your career, leaving you unable to work in your chosen profession or perform the duties you once did. This loss of earning capacity can devastate your financial future and leave you wondering how you will provide for yourself and your family.
At Mueller Schmidt Mulholland & Cooling, we understand the life-altering impact a loss of earning capacity can have on injury victims and their loved ones. For over 56 years, our dedicated personal injury lawyers have fought tirelessly to help Nebraskans recover the compensation they need to move forward after a debilitating accident. We believe that negligent parties should be held accountable for the full extent of the harm they cause, including the loss of an individual’s ability to earn a living.
What Is Loss of Earning Capacity?
Loss of earning capacity refers to the difference between what an individual could have earned in the future over their lifetime if they had not suffered an injury versus what they will likely earn now with the limitations caused by the accident. It compensates injury victims for the long-term impact of the harm on their ability to work and advance in their careers.
Loss of Earning Capacity vs. Lost Wages
Many people confuse loss of earning capacity with lost wages, but they are distinct concepts in personal injury law. Recovering damages on future lost wages is different. Lost wages refer to the income you lose out on immediately after an accident while recovering and unable to work.
On the other hand, loss of earning capacity looks at an injury’s long-term impact on your ability to earn a living. It considers factors like:
- Your age and life expectancy
- Your education, training, and experience
- Your job history and career trajectory
- The physical and mental requirements of your occupation
- Your ability to adapt to a new line of work
- The availability of alternative employment opportunities
- The market demand for your skills and expertise
Essentially, lost wages compensate you for the income you have lost due to your injuries. By contrast, loss of earning capacity compensates you for the income you will likely lose out on because of your diminished ability to work.
Factors that Influence Loss of Earning Capacity
Calculating loss of earning capacity is a complex process that requires input from medical, vocational, and economic experts. These professionals work together to assess an injury’s total impact on an individual’s career prospects and lifetime earnings. Learn about some of the key factors they consider when computing loss of earning capacity.
Severity of the Injury
Generally, the more severe and permanent an injury is, the greater the loss of earning capacity will be. It affects how soon you are able to return to work. For example, a spinal cord injury that results in paralysis will typically have a more significant impact on an individual’s ability to work than a broken bone that heals completely.
Age and Work-Life Expectancy
Younger injury victims tend to have higher loss of earning capacity awards than older individuals because they have more working years ahead of them. Similarly, people in industries with longer work-life expectancies (such as office workers) may receive more significant awards than those in physically demanding jobs that are harder to sustain as you age (such as construction workers).
Education and Training
Highly educated and skilled workers often have greater earning potential than those with less advanced degrees or specialized training. An injury that prevents someone from using their hard-earned expertise can cause a substantial loss of earning capacity.
Career Trajectory
An individual’s career arc at the time of the injury plays a significant role in calculating loss of earning capacity. A young attorney on the partnership track at a prestigious law firm, for example, would likely have a higher earning potential than someone who has already plateaued in their career.
Ability to Adapt
Some injury victims can transition to new lines of work that accommodate their physical or cognitive limitations. Others may need help finding alternative employment that offers comparable pay and benefits. The more difficulty someone has adapting to a new career, the greater their loss of earning capacity will likely be.
Local Job Market
Economic experts also consider the local job market and availability of suitable employment opportunities when calculating loss of earning capacity. An injury victim in a rural area with few job options may have a more challenging time finding alternative work than someone in a large city with a diverse economy.
Proving Loss of Earning Capacity
Demonstrating a loss of earning capacity requires more than just testimony from the injured individual about their career plans and aspirations. To build a strong case, your attorney will likely work with experts to gather evidence and provide professional opinions on your diminished earning potential.
This may include:
- Medical Experts: Doctors and specialists can testify about the severity of your injuries, their limitations on your ability to work, and your long-term prognosis. They can also explain any future medical treatment you may need that could impact your employability.
- Vocational Experts: These professionals assess your skills, experience, and physical capabilities to determine what types of jobs you can reasonably perform with your injuries. They can also provide insights into the availability of suitable work in your local market and the typical pay for those positions.
- Economic Experts: Economists and financial analysts use complex formulas to calculate your projected lifetime earnings with and without injuries. They consider factors like your age, education, work history, and the average earnings in your industry to arrive at a fair loss of earning capacity figure.
Testimonies from these experts can be powerful evidence in a personal injury case, helping to paint a picture of the full extent of your loss of income for the judge or jury.
Contact Mueller Schmidt Mulholland & Cooling for Help with Your Loss of Earning Capacity Claim
If you or a loved one has suffered a severe injury that has diminished your ability to work and earn a living, you may be entitled to compensation for your loss of earning power. Calculating and proving this type of damage can be complex and challenging, however, especially when you are already dealing with the physical and emotional toll of your injuries.
At Mueller Schmidt Mulholland & Cooling, our experienced Omaha personal injury attorneys have been helping Nebraskans recover the compensation they deserve for over 56 years. We understand the devastating impact a loss of potential income can have on your life. Our law firm is dedicated to fighting for your rights and holding negligent parties accountable for the loss of your future earning potential.
If you have questions about loss of earning potential or any other aspect of your personal injury claim, contact Mueller Schmidt Mulholland & Cooling at 402-999-9000 to schedule your free consultation. In addition, we serve clients throughout Nebraska and will travel to you if you are away from our office. Do not wait to get the legal help you need – call us now to get started in seeking compensation.
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