N002582
January 21, 2002
To: Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
U.S. Department of Justice
Main Bldg., Room 3140
950 Pennsylvania Ave.
Washington, D.C. 20530
RE: Comments on the Interim Rules of the 9/11 Victim Compensation Fund
We have closely followed the legal and forensic economic debate regarding
the special rules generated by your office for the compensation of victims'
families in the wake of September 11. and I attempt to offer unique insight into the proper, credible and equitable compensation of the
victim's families as dually certified vocational rehabilitation and forensic
economic experts.
I attach my 17 page CV to this letter reflecting my significant experience,
certifications, peer review and formal education in both disciplines. These
speak most directly to expected earnings and pecuniary loss from the
vocational perspective. Moreover, we are willing to meet in a group meeting
setting with you and your experts along with the current Presidents of the
American Board of Vocational Experts (ABVE) and the American Board of
Rehabilitation Economics Association (AREA).
Much of the debate thus far has been focused on issues of lost household
services (HHS), and work life expectancy. While senior members of the
National Association of Forensic Economics have focused heavily on these
issues in relation to the VCF in both the print and television media, these are relatively
minor issues compared to expected earnings. It should nonetheless be stated that the
male hourly data emanating form the "Dollar Value of a Day" study is inconsistent with
eight previous HHS time use studies. These figures appear plaintiff oriented in our
experience.
In the case of HHS, the great majority of the decedents logically were full time workers
rather than home makers. They otherwise would not have been at work at the Pentagon
or WTC when the tragic events of September 11 took place. Consequently, the ways the
rules read these victims' families are not entitled to this element of pecuniary loss. It is almost a moot issue.
Secondly, the total differences among the three primary work life expectancy tables are
minor in the case of males. These include the 1986 BLS study, the 1996 Hunt, Pickersgill
& Rutemiller Study, and the two studies by James Ciecka published in the 90s. Conversely,
in the case of females, use of the aged BLS studies (1980 data) reflect a significant
difference form the three more recent studies delineated above. Using the BLS studies in
the case of female decedents' would thus be inequitable as they do not reflect positive
changes over the last 20 years.
It was our understanding that the VCF had recently decided to use the most recent 1998
study by Ciecka as a result of this forensic economic input. Nonetheless, both and are suggesting as of today that this in fact has not been accomplished and the inappropriate BLS (in the case of females) is still being advertised by the VCF.
Most importantly and irrespective of the preceding, the earnings issue brought up in the
New York Times article, " The Damaged Spirit of the 9/11 Fund," by Fred Price and Mitch
Kleinman dated January 16, 2002 suggests with great face validity that many of the WTC
victims were young professionals in their 20s and 30s. In these cases, the decedent's
demonstrated earnings may not accurately reflect their long term expected earnings even with
robust age earnings adjustments. Vocational issues to be addressed in this context
are the individual specific human capital factors of formal education and work experience
in addition to the potential for further career advancement.
While we understand that the VCF has provided for a generous age earnings wage growth
factor, especially in the case of these younger workers, it still may not capture the earnings
potential of the young professional decedents given the following assumptions: 1) these
decedents were among the brightest and best educated Americans; 2) they were working
for Fortune 500 companies in early career; and 3) their human capital educational
expenditures were not nearly fully realized and would not have been until at least mid
career when significant promotional opportunities would have arisen.
Vocationally, without additional formal education in most cases, one's earning are unlike
to increase beyond the age earning cycle and/or standard wage growth after the age of
35 or 40. There is methodology that can assist the VCF in determining expected
earnings. Specifically, the input of a vocational expert or vocational economist can help
establish one's promotability based on age, education, and work experience. Wage rate
data from Economic Research Institute (ERI) can then peg the expected earnings based
on occupational and experience should these differ form the actual earnings as depicted in
previous W-2 statements. Perhaps a particular age cut off period could be implemented
wherein those under the age of 35 would be entitled to an independent vocational
assessment of expected earnings (earning capacity).
ERI is a Redmond, WA. based research company that provides executive compensation
and salary wage data. It is primarily an instrument used by human resource professionals.
An increasing number of vocational experts and forensic economists are utilizing this
statistically validated wage data. It covers most occupations in cities exceeding
populations of 50,000.
are currently completing a closely related paper for a special Spring 2002 employment law edition of the Journal of Legal Economics in addition to presenting this paper at the 76th annual meeting of the Western Economics Association this summer at Seattle. would also be pleased to discuss this proposed methodology with the VCF, and any other interested parties at your convenience.
Many members of the professional vocational community certified by ABVE and/or AREA
have extended reliable offers to us to perform pro bono work on behalf of the VCF. These
commitments have transpired just in the laws two days following our spreading the news
of the dire need for vocational appraisals in many of these cases your office has been
charged to evaluate for pecuniary damages. Scores more will follow this preliminary listing
should you concur that the need arises. If you do not concur, many of these experts will
undoubtedly be called to represent the decedent's families in civil trials bypassing the fund. These include the following colleagues:
We fear that failure to professionally address this far more critical issue of pecuniary loss will result in seriously under funding in the case of young professionals just starting their careers. These men and women did not have the opportunity to advance their careers due to the tragedy of September 11. A second injustice would befall the victim's surviving family if this essential factor remains a secondary issue and unresolved.
We remain,
Sincerely Yours
Individual(s) Comment
Bel Air, CA
Attachment 1:
Curriculum Vitae