Also known as: wage earning capacity · wage-earning capacities · wage earning capacities · earning capacity · loss of earning capacity
Written by attorneys · grounded in primary & secondary sources — see below
A measure of a person's ability to earn wages through employment. Impairment of this measure constitutes a pecuniary loss for which compensatory damages may be awarded only upon proof of actual harm.
Wilma Wright suffered a back injury when a hotel luggage cart struck her. She proved that the injury prevented her from returning to her prior role as a construction foreman. A jury awarded her compensation for the resulting reduction in her wage-earning capacity after she presented evidence of lower earnings in her new administrative position.
William Williams received a permanent partial disability award under the Longshore Act after injuring his leg. When he later acquired new skills that increased his actual post-injury wages, his employer sought modification. The court examined whether the rise in wage-earning capacity justified reducing the award even without any change in his physical condition.
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Wanda Weaver sustained a severe injury that reduced her wage-earning capacity. She died before trial from unrelated causes. Her estate could recover only for the impairment she actually experienced before death and could not claim prospective losses after that date.
Wesley Wong, a longshore worker, obtained a state workers' compensation award for lost wage-earning capacity. He later pursued a federal claim arising from the same injury. The court considered how the prior award affected the measure of damages available under federal law.
Winter Wolfe sued for injuries that permanently lowered his wage-earning capacity. At trial the defendant sought to introduce evidence that any award would not be subject to income tax. The court addressed whether that evidence should influence the jury's assessment of the proper amount of damages.
The plaintiff must show actual pecuniary loss. Mere proof of injury is insufficient. Evidence such as reduced wages, inability to perform prior work, or other concrete financial impact is required.
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No. An increase in wages may reflect new skills rather than full restoration of capacity. Courts examine whether the wages fairly represent earning capacity under the governing statute.
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Recovery is limited to harms suffered before death. Prospective losses after death are not recoverable under survival statutes.
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No. The concept applies in ordinary tort actions whenever a plaintiff proves pecuniary loss from reduced ability to earn wages.
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…of needing public relief are thereby diminished, this concern would be greater, not less, in the case of death, where the loss of earning capacity is total. This court therefore concludes that Congress, as with all exemptions under Section 104, ‘. . . intended to relieve a taxpayer who has the misfortune to become ill or injured. . .…