Earning capacity is your ability to make money through work, considering your education, skills, experience, age, and health both before and after your injury. Unlike lost wages, which are the specific paychecks you've already missed, earning capacity looks at how your injury will affect your ability to earn money for the rest of your working life. If your injury prevents you from returning to your previous job or limits the type of work you can do, you may have a claim for diminished earning capacity even if you're currently working in a different, lower-paying position.
For example, if you were a construction worker making $50,000 per year but your back injury now forces you to work a desk job making $30,000 annually, you can seek compensation for that $20,000 yearly difference multiplied by the number of years you would have continued working. Calculating earning capacity often requires expert testimony from economists or vocational rehabilitation specialists who analyze your work history, education, and the impact of your injuries on your future employment prospects. This type of damage can be substantial in cases involving young workers or those with serious permanent injuries that significantly limit their career options.
