Economics Majors are Hot!

MSN reports the highest starting salaries, and economics majors, have the highest at $52,926. They did not report the variance, but clearly salaries vary by industry, with consulting paying the most on average.

Economic damages testimony at an employment arbitration

Presenting economic damages testimony at a arbitration is bit different from doing the same at a trial. At an arbitration there is no jury. Instead it is more like a bench trial in a more informal setting, usually an attorneys office. Plus the time allotted for economic damage testimony is usually a lot shorter.

Most importantly, since the trier of fact is not a jury, there is little need to go thru a lot of the areas that you would with a jury trial. For instance, the arbitrator is more than likely familiar with the concept of discounting. Just telling them what the discount factor is (and reinforcing that a high discount factor means low damages and vice versa is usually enough.)

Here is one line of questions (based on recent economic damages testimony in an employment termination case)

1. Briefly introduce the economists to the arbitrator

2. What were you asked to do? At this point, unlike during the writing of the report, the response by the economist will be more pointed and direct.

3. In performing your economic analysis of the plaintiff's economic damages, what did you review? For the sake (and sanity) of all involved, the economist's response should be general but all inclusive. For example, "I reviewed several classes of documents. These included, pleadings, payroll records, tax returns, and retirement information"

4. Generally can you describe what you did? This is short and sweet. "I compared the income the plaintiff was making prior to her termination to that which she is currently making" Briefly describe what the before and after termination packages included.

5. Quickly go more into detail in what was done.

- Hit earnings, future increases, what the discount factor was that was used.
- Explain what was NOT included.

Damages to credit: Is it worth the work?

As posted before, one common complaint of plaintiffs in wrongful termination cases is that the loss of the job and income caused them to run up charges, become late on installment payments and ultimately ruin the person's credit.

While the situation could clearly happen, in many situations the actual damage, if it were measurable, would be limited. Why?

Reason 1: The individuals that would be more likely to be affected and have to run up credit to the limit are most likely lower wage earners.

Individuals who are higher wage earners would be more likely to have the resources to draw on that would help them ride out the somewhat temporary effects of a employment termination.

Reason 2: The higher interest cost paid by the plaintiff would be limited both in time and most likely by the income level of the plaintiff.

As mentioned in reason 1, the person who is most likely to be effected is more likely to have a lower level of income which would limit the person's ability to get credit in the first place. Furthermore, the damages in most instances would be limited to the difference between the before employment termination and after employment termination interest. In addition, the damages could be expected to be limited over time because the person's credit score and access to credit would increase as the person acquires replacement employment.

For instance, a person with $10k in debt, who paid 10% per year on that debt before the termination would pay $1,000 per year in interest. If the same person after the employment termination was forced to pay 15% interest rate, then they would pay $1,500 per year, or $500 more per year.

Is the $500 per year damage for say 5 to 7 more years worth the effort of proving up the loss?

Your call....

Where's the luv?

Not all have luv for the work economists do:

'An economist is a surgeon with an excellent scalpel and a rough-edged lancet, who operates beautifully on the dead and tortures the living. ', Nicholas Chamfort, 18th Century writer

'An economist is a man who states the obvious in terms of the incomprehensible'
Alfred A. Knopf , 20th Century book publisher