How is permanently lost earning capacity valued when I can never work again?
When an injury ends a person’s ability to work for good, Georgia measures the loss as the value of the earning capacity that has been taken away, projected across the years the person would otherwise have worked. The claim is for lost capacity to earn, not merely the paycheck from one particular job, so it reaches the full economic potential the injury destroyed.
What “earning capacity” means ¶
Lost earning capacity is broader than lost wages. It asks what the person was capable of earning over a working lifetime, considering age, education, skills, work history, and the trajectory the career was on. A jury may value this loss even where exact future income cannot be pinned down, because the question is the diminished ability to earn rather than a guaranteed salary. When the injury forecloses any return to work, the analysis covers the entire remaining work-life expectancy.
Building the valuation ¶
Two experts usually anchor the figure. A vocational rehabilitation expert establishes that the person cannot return to gainful employment and defines any residual capacity. An economist then projects the earnings stream that has been lost. That projection typically accounts for:
- Pre-injury earnings and realistic career growth.
- The person’s work-life expectancy.
- Fringe benefits and, where appropriate, wage growth.
- Any reduced earnings the person can still manage, subtracted from the total.
Because these are expert opinions, they must satisfy O.C.G.A. § 24-7-702, which Georgia courts apply using the Daubert reliability standard, so the assumptions and methods have to be defensible.
Reducing the award to present value ¶
A lifetime earnings loss is paid as a present-day lump sum, so the future stream is reduced to present value. O.C.G.A. § 51-12-13 lets the jury make that reduction using a 5 percent discount rate or another rate it deems appropriate. The economist usually presents this calculation, and the jury weighs competing methods before settling on a figure.
The bottom line ¶
When a Georgia injury permanently ends the ability to work, lost earning capacity is valued by projecting the earnings the person could have made over a full work life, then reducing that stream to present value. Vocational and economic testimony built on reliable methods gives the jury the foundation to award this loss with the certainty Georgia law expects.
This article is for general educational and informational purposes only and is not legal advice. It does not create an attorney-client relationship, and Georgia law may change. For advice about a specific situation, consult a licensed Georgia personal injury attorney.