What is loss of earning capacity and how is it different from lost wages?

Loss of earning capacity compensates you for the reduction in your ability to earn income in the future as a result of your injury — which is different from lost wages, which cover income you have already missed during recovery. Lost wages are concrete and easily documented from pay records. Loss of earning capacity is forward-looking and considers what you could have earned over your remaining working life had you not been injured, compared to what you can realistically earn now given your permanent limitations. Importantly, you can recover for diminished earning capacity even if you returned to your same job at the same pay, because the law recognizes that your injury may limit your ability to advance, work overtime, change careers, or remain employed long-term. Proving this claim typically requires expert testimony: a vocational rehabilitation expert assesses how your injury restricts the jobs you can perform, and a forensic economist calculates the present value of the income difference over your work-life expectancy, accounting for inflation, raises, and benefits you would have received. This component is often substantial in cases involving permanent injuries to younger, higher-earning claimants.