How Vocational Experts Calculate Future Earnings in Arizona Cases

TL;DR

Vocational experts in Arizona calculate future earnings by first establishing a person’s pre-injury earning capacity based on their education, work history, and skills. They then analyze medical records and functional limitations to determine a post-injury residual earning capacity. The expert identifies viable jobs the individual can still perform within their local Arizona job market through labor market surveys and transferable skills analysis. The difference between the pre-injury and post-injury earning capacities, projected over the person’s remaining work-life, represents the total loss of future earnings. This calculation relies on objective data from sources like the Bureau of Labor Statistics (BLS) and O*NET.

Key Highlights

• Baseline Established: The expert first determines the individual’s earning potential before the injury.
• Medical Review: All medical evidence, including physician reports and Functional Capacity Evaluations (FCEs), is analyzed to define physical and mental limitations.
• Skills Analysis: A Transferable Skills Analysis (TSA) identifies which of the person’s existing skills are still usable in a new line of work.
• Market Research: The expert conducts a Labor Market Survey (LMS) to find real, available jobs in the person’s specific Arizona locality that match their skills and limitations.
• The Calculation: The core formula is: (Pre-Injury Earning Capacity) – (Post-Injury Residual Earning Capacity) = Loss of Earning Capacity.
• Data-Driven: The entire process is grounded in verifiable data from government and industry sources, not guesswork.

In Arizona, when an individual’s ability to work is compromised due to an injury, the financial consequences can extend for decades. According to the Bureau of Labor Statistics, Arizona employers reported thousands of nonfatal workplace injuries and illnesses each year, many of which result in days away from work or permanent job restrictions. In these situations, determining the monetary value of lost future income becomes a critical component of personal injury, medical malpractice, and workers’ compensation claims. This is not a simple matter of multiplying a former salary by the number of years until retirement; it is a complex evaluation that requires specialized expertise.

The legal framework in Arizona allows for the recovery of damages related to a diminished ability to earn a living, a concept known as “loss of earning capacity.” This is different from a simple calculation of lost wages. It assesses the loss of the ability to earn, which requires a forward-looking analysis of what a person could have reasonably earned throughout their career had the injury not occurred. To present this type of evidence in court, legal teams rely on the objective, data-driven opinions of a vocational expert. This professional serves as a bridge between the medical evidence of an injury and the real-world economic impact on a person’s work life.

A vocational expert’s analysis provides a structured and defensible method for quantifying what was lost. They systematically dissect an individual’s professional life before the incident and contrast it with the new reality shaped by physical or cognitive limitations. This process involves a meticulous review of work history, a deep understanding of medical reports, and a thorough investigation of the current Arizona job market. The final opinion they provide gives judges, juries, and insurance carriers a clear, evidence-based figure representing the financial scope of a life-altering injury.

The Foundational Role of the Vocational Expert in Arizona Litigation

Before we can understand the calculations, we must first understand the calculator. A vocational expert (VE) is a highly trained professional who specializes in employment, vocational rehabilitation, and the economic aspects of work. They possess a unique skill set that allows them to evaluate a person’s ability to secure and maintain employment following a significant injury or the onset of a disability.

Who is a Vocational Expert?

A qualified vocational expert typically holds advanced degrees in fields like rehabilitation counseling, psychology, or vocational evaluation. Many are credentialed as a Certified Rehabilitation Counselor (CRC) or a Certified Vocational Evaluator (CVE), which signifies a high level of professional competence and adherence to a strict code of ethics. Their role in Arizona litigation is to serve as an impartial expert witness. They do not advocate for one side; instead, they provide an objective opinion based on a standardized methodology and verifiable data. This objectivity is what makes their testimony valuable and admissible in court.

Why is a Vocational Expert’s Opinion So Important?

In any case involving a long-term or permanent injury, the central question is: “How has this injury financially impacted the person’s life?” A vocational expert answers this by addressing several key points:

• What kind of work was the person capable of performing before the injury?
• What were their earnings and career growth prospects?
• What are their specific work-related limitations now, according to the medical evidence?
• What skills do they still possess that can be used in the workforce?
• What jobs, if any, exist in their local Arizona job market that they can perform with their new limitations?
• What do those available jobs pay?

The expert synthesizes this information into a formal report and, if needed, provides testimony in a deposition or at trial. They effectively translate complex medical jargon into practical, vocational terms that a jury can understand. For example, a doctor might state a patient has a “15% permanent impairment of the lumbar spine.” A vocational expert explains what that means for a construction worker in Tucson: he can no longer lift more than 25 pounds, cannot bend or stoop frequently, and is thus precluded from all medium and heavy-duty occupations, effectively ending his career in that field.

The Vocational Expert vs. The Forensic Economist

It is common for a vocational expert to work in tandem with a forensic economist. The two roles are distinct but complementary.

• The Vocational Expert: Determines the loss of earning capacity on an annual basis. They identify the “what” and “why” of the vocational loss. For example, the VE might conclude that an injured nurse in Phoenix has an annual loss of earning capacity of $30,000 because she can no longer work full-time in a hospital setting and must take a lower-paying administrative role.
• The Forensic Economist: Takes the annual loss figure provided by the vocational expert and calculates its present value. They apply economic principles to project that annual loss over the individual’s expected work-life, factoring in inflation, career growth rates, and discount rates to arrive at a single lump-sum figure.

Together, these two experts provide a complete picture of the economic damages, from the vocational limitations to the final dollar amount presented in the legal claim.

Establishing Pre-Injury Earning Capacity: The Baseline Calculation

The entire process of calculating lost future earnings begins with creating a clear and accurate picture of the individual’s vocational standing before the injury occurred. This “before” snapshot is known as the pre-injury earning capacity. It serves as the baseline against which all losses are measured. This is not always as simple as looking at the person’s last paycheck. The expert’s goal is to determine the person’s full capacity to earn, which includes their potential for advancement and wage growth.

A Comprehensive Review of Work and Education History

The vocational expert conducts a detailed interview with the individual and performs a thorough review of their records. This includes:

• Employment History: A chronological list of every job held, including job titles, duties performed, dates of employment, and reasons for leaving.
• Educational Records: High school diplomas, college transcripts, vocational school certificates, and any specialized licenses or certifications.
• Financial Documents: Tax returns, W-2s, and pay stubs are examined to establish a documented earnings history. The expert typically looks at a period of three to five years before the injury to identify a stable earnings pattern.
• Performance Reviews: Past job evaluations can provide insight into the person’s work quality, reliability, and potential for promotions.

Considering Career Trajectory and Growth

A person’s earning capacity is not static. A 25-year-old apprentice electrician has a different long-term capacity than a 55-year-old journeyman electrician nearing retirement. The vocational expert accounts for this by considering the individual’s career trajectory.

• Union and Trade Workers: For individuals in unions or skilled trades in Arizona, the expert will review union contracts and pay scales to project expected wage increases based on seniority and experience.
• Salaried Professionals: For professionals in fields like IT, finance, or healthcare, the expert will use government data to project typical career progression and salary growth for that occupation in the relevant metropolitan area (e.g., the Phoenix-Mesa-Scottsdale MSA).
• Entry-Level Workers: If the injured person was young and at the beginning of their career, the expert will evaluate their education and early work history to project a likely career path and its associated earnings.

The final pre-injury earning capacity figure is a well-supported opinion of what the individual could have reasonably been expected to earn annually over the course of their work-life had the injury never happened.

Assessing Post-Injury Limitations: The Impact of Medical Evidence

Once the “before” picture is established, the vocational expert must define the “after.” This involves a meticulous analysis of all available medical evidence to understand the individual’s new work-related limitations. The expert does not make medical judgments; rather, they interpret the findings of physicians and therapists to define the person’s residual functional capacity (RFC).

Translating Medical Reports into Vocational Terms

The VE reviews a wide range of medical documents, with a focus on objective findings and functional restrictions. Key documents include:

• Physician Reports: Notes from treating physicians, specialists (like orthopedists or neurologists), and surgeons.
• Functional Capacity Evaluation (FCE): This is often one of the most important documents. An FCE is a comprehensive set of tests administered by a physical or occupational therapist to directly measure an individual’s physical abilities. It provides specific, objective data on lifting, carrying, sitting, standing, walking, and other physical tolerances.
• Impairment Rating: Often based on the American Medical Association (AMA) Guides to the Evaluation of Permanent Impairment, this rating provides a percentage of whole-person impairment. While not directly translatable to a vocational limitation, it provides context for the severity of the injury.
• Psychological or Neuropsychological Evaluations: In cases involving traumatic brain injury (TBI), chronic pain, or psychological trauma like PTSD, these reports are crucial for defining cognitive and emotional limitations, such as problems with concentration, memory, or social interaction.

From Medical Restrictions to Vocational Realities

The expert’s job is to convert these medical findings into concrete vocational terms. For example:

• A medical report stating “no lifting over 20 pounds” translates to a preclusion from all medium, heavy, and very heavy work as defined by the Department of Labor. This immediately eliminates a vast number of jobs in construction, manufacturing, and warehousing.
• An FCE result showing an inability to stand or walk for more than two hours in an eight-hour day limits the person to sedentary work.
• A neuropsychological report detailing deficits in short-term memory and multi-tasking ability would preclude complex, high-stress jobs and point toward simple, routine, one-to-two-step tasks.

This step is critical because it defines the universe of potential jobs the person can still perform. The more restrictive the limitations, the smaller that universe becomes. The expert must create a clear and defensible profile of the individual’s post-injury capabilities before they can begin searching for suitable employment options.

Determining Residual Earning Capacity: The Search for Viable Work

With a clear understanding of the individual’s post-injury limitations and remaining abilities, the vocational expert can now determine their residual earning capacity (REC). This is an estimate of what the person is capable of earning in the competitive labor market given their new circumstances. This process involves two key components: a Transferable Skills Analysis and a Labor Market Survey.

The Transferable Skills Analysis (TSA)

An injury rarely erases a person’s entire skill set. A TSA is a systematic process where the expert identifies the skills the individual acquired through past work and education and determines which of those skills can be transferred to new, less physically or mentally demanding jobs.

For example, consider a 45-year-old auto mechanic in Glendale who suffers a severe back injury and can no longer perform the physical duties of his job. A TSA would identify his transferable skills:

• Diagnostic Skills: Ability to troubleshoot complex mechanical problems.
• Customer Service Skills: Experience explaining technical issues to customers.
• Parts Knowledge: Extensive familiarity with automotive parts and their functions.
• Computer Skills: Proficiency in using diagnostic software and parts ordering systems.

These skills are highly transferable to sedentary or light-duty jobs. The TSA allows the expert to look beyond the person’s former job title and focus on their core competencies.

The Labor Market Survey (LMS)

The next step is to see if jobs that match the person’s limitations and transferable skills actually exist and are available in their local area. This is the Labor Market Survey. It is not a hypothetical exercise; the expert must identify real, open jobs.

The process for an LMS in Arizona involves:

1. Defining the Geographic Area: The search is typically limited to a reasonable commuting distance from the person’s home, such as Maricopa County for someone living in Phoenix or Pima County for someone in Tucson.
2. Identifying Potential Job Titles: Based on the TSA and RFC, the expert generates a list of suitable job titles. For our injured mechanic, this might include “Auto Parts Advisor,” “Service Writer,” or “Warranty Claims Adjuster.”
3. Searching for Openings: The expert uses online job boards, employer websites, and direct contact with companies to find and document actual job openings for those titles.
4. Verifying Job Requirements: For each opening found, the expert analyzes the job description to confirm that its physical and mental demands are within the individual’s documented limitations. They also confirm the wage or salary being offered.

The LMS provides concrete evidence of what the person could earn if they were to re-enter the workforce. It grounds the expert’s opinion in the reality of the current Arizona job market, making the final calculation far more credible. The goal is to present a realistic and achievable vocational plan.

The Core Data and Tools: A Vocational Expert’s Toolkit

A vocational expert’s opinion is only as strong as the data that supports it. To ensure their conclusions are objective and defensible, experts rely on a set of standardized, widely accepted government and industry resources. These tools provide comprehensive information on job duties, physical requirements, skill levels, and wage data across the United States, with the ability to drill down to state and local levels.

Bureau of Labor Statistics (BLS)

The BLS is the primary source for wage data and employment projections. The expert uses several BLS publications and databases:

• Occupational Employment and Wage Statistics (OEWS): This program provides detailed wage data for over 800 occupations. An expert can use the OEWS to find the mean and median hourly and annual wages for a specific job, such as “Heavy Equipment Mechanic,” in the state of Arizona or even in a specific metropolitan area like Phoenix or Flagstaff. This is crucial for establishing both pre-injury and post-injury earning capacity.
• Occupational Outlook Handbook (OOH): The OOH provides information on the typical duties, required education, pay, and job outlook for hundreds of occupations. This helps the expert understand the nature of a job and its long-term viability.

O*NET OnLine

Developed for the U.S. Department of Labor, ONET is a massive, free online database containing detailed information on nearly 1,000 occupations. For a vocational expert, ONET is an indispensable tool. It provides granular detail on:

• Tasks and Activities: A specific list of duties performed in a job.
• Work Context: Environmental factors like exposure to hazards or the required pace of work.
• Skills and Abilities: The specific cognitive, psychomotor, and physical abilities needed.
• Physical Demands: Detailed information on the level of strength, dexterity, and coordination required.

An expert can use O*NET to cross-reference the physical demands of a potential job with the limitations identified in an FCE report, ensuring a suitable match.

Dictionary of Occupational Titles (DOT) and its Companions

While largely replaced by O*NET for general use, the DOT and its companion document, the Selected Characteristics of Occupations (SCO), are still referenced in vocational and legal settings. Their most enduring contribution is the classification of jobs by their exertional level:

• Sedentary: Lifting no more than 10 pounds. Involves mostly sitting.
• Light: Lifting no more than 20 pounds, with frequent lifting of up to 10 pounds.
• Medium: Lifting no more than 50 pounds, with frequent lifting of up to 25 pounds.
• Heavy: Lifting no more than 100 pounds, with frequent lifting of up to 50 pounds.
• Very Heavy: Lifting in excess of 100 pounds.

These classifications provide a standardized language for matching a person’s lifting restrictions to the world of work. When a doctor says a patient has a “20-pound lifting restriction,” a VE immediately knows this limits them to sedentary and light-duty work.

By using these public, verifiable data sources, the vocational expert ensures their methodology is transparent and can be replicated, which is essential for withstanding scrutiny in a legal proceeding.

Synthesizing the Data: The Final Calculation and Report

The final step in the process is to bring all the pieces of the analysis together to arrive at a clear, concise, and defensible opinion on the individual’s loss of future earning capacity. This involves a straightforward calculation, an understanding of work-life expectancy, and the creation of a comprehensive written report.

The Ultimate Formula

At its core, the calculation performed by the vocational expert is simple arithmetic, but it is built upon the extensive research and analysis detailed in the previous sections.

(Pre-Injury Earning Capacity) – (Post-Injury Residual Earning Capacity) = Annual Loss of Earning Capacity

Let’s return to our example of the auto mechanic in Glendale:

• Pre-Injury Earning Capacity: Based on his work history, skills, and BLS data for his occupation in the Phoenix area, the expert determines his pre-injury capacity was $65,000 per year.
• Post-Injury Residual Earning Capacity: Through a TSA and an LMS, the expert identifies that the most suitable and available job for him is an “Auto Parts Advisor,” which pays, on average, $40,000 per year in his area.
• Annual Loss Calculation: $65,000 – $40,000 = $25,000 per year.

This $25,000 figure represents the expert’s opinion on the mechanic’s annual loss of earning capacity.

Factoring in Work-Life Expectancy

The annual loss figure must be projected over the individual’s remaining work-life. Vocational experts do not guess how long someone will work. They use statistical tables published by economists and government agencies that provide work-life expectancy figures based on factors like age, gender, education level, and race.

If the 45-year-old mechanic has a statistical work-life expectancy of another 18.5 years, the vocational expert’s opinion sets the stage for the forensic economist. The economist will then take the $25,000 annual loss and calculate its present value over that 18.5-year period, accounting for factors like inflation and interest rates.

The Vocational Expert’s Report

All of this information is compiled into a formal, written report that will be submitted as evidence. A well-structured report in an Arizona case will typically include:

• A summary of the expert’s qualifications and credentials.
• A list of all documents reviewed (medical records, depositions, financial statements, etc.).
• A detailed analysis of the individual’s education and work history.
• A summary of the pertinent medical evidence and resulting functional limitations.
• The complete Transferable Skills Analysis.
• The results of the Labor Market Survey, including specific job postings that were found.
• A clear statement of the pre-injury and post-injury earning capacities.
• The final calculation and the expert’s ultimate opinion on the annual loss of earning capacity.

This report provides the legal team with the foundation for their economic damages claim and serves as the basis for the expert’s testimony should the case proceed to trial.

Conclusion

Calculating the loss of future earnings in an Arizona legal case is a methodical and evidence-based discipline. It is far removed from simple speculation. A qualified vocational expert systematically evaluates an individual’s life before an injury, creating a data-supported baseline of their earning capacity. They then conduct a rigorous analysis of medical evidence to define the new boundaries of the person’s work life. By integrating a transferable skills analysis with real-world labor market data, the expert identifies a realistic and achievable path forward, establishing a post-injury earning potential.

The final calculation, representing the difference between what was and what now is, provides a clear and quantifiable measure of the injury’s long-term financial impact. This process relies on standardized tools, government data, and a consistent methodology to ensure the final opinion is objective, credible, and can withstand legal challenges. The expert’s role is to bring clarity to a complex situation, translating a personal tragedy into the precise language of vocational and economic loss.

Understanding this process is vital for anyone involved in a claim where the ability to work has been compromised. The value of a vocational expert’s analysis cannot be understated, as it provides the factual foundation upon which fair and just compensation is built. If you are facing a situation involving a potential loss of future earnings, it is critical to work with a legal team that understands the importance of this expertise. Securing a comprehensive vocational evaluation is a decisive step in ensuring that the full scope of your economic damages is properly assessed and presented. Contact us for free consultation today.