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Government agencies struggle with the task of placing a value on an individual life

Media outlets on  February 16 reported on developments in Washington, D.C., as federal agencies arm-wrestled over placing a value on human life.  The New York Times, for example, reported that federal agencies are allowed to assign different values for one life, and the "valuations" utilized by various agencies vary  widely.  The FDA, for example, places a value of $7.9 million dollars on a single life, while the EPA values a life at $9.1 million dollars.  The Transportation Department uses a value of approximately 6 million dollars. 

These estimates are calculated by different means in each agency.  Some rely upon consumer surveys estimated how much individuals would pay to avoid a particular risk.  Other valuations rely on computations of incremental pay that must be offered to induce workers into more risky occupations.  Still others simply add up the total wages lost when a worker dies:  obviously this calculation--unlike most Americans--- places no value on a worker's life outside the trenches.

Corporations and the government use these valuations to determine--by cost-benefit analysis--whether, for example, a road should be made safer, new labeling should be required on prescriptions, and whether there should be tighter restrictions on air pollution.  The involved agency and regulated corporations attempt to determine how many lives would be saved by the proposed change, and then multiple that number by the estimated value of a single life:  the "value" of the regulatory change is then compared to the cost of the modification, regulation or investigation, to determine whether it is justified.

Somehow, the whole business seems a little like trying to assess how many angels can dance on the head of a pin.  That is especially true in a walk of life where legislators and jurors routinely place a "value" on a life--or the "cost" of a wrongful death--at something well below the economists' numbers.   A few years ago, Michigan  "reformers" held that the "value" of a life lost in most malpractice and product liability cases is $285,000.00--plus lost income, if there is any.  

Michigan's legislators, in another example, have mandated a minimum auto liability coverage of only $20,000.00, and all of th no fault and tort "reforms" since 1974 have refused to increase that value with the cost of living.  [If you hadn't already realized it, tort "reforms" only reform for the benefit of the insurance industry--not for the benefit of insureds or consumers.]  Thus, as a practical matter, we often see cases where the "value" of a life wrongfully ended is as low as $20,000.00 or $50,000.00--even though more reasonable mandatory minimums could be legislated at a cost per insured driver of less that fifty dollars per year. 

Unfortunately, the "value of a life"  is never as great, in theoretical terms, as it is to the person who owns it; and the value is never as great in anticipation of loss (i.e. when  you go to the voting booth or when you write your check for an insurance premium) as it is when the loss is realized.  And insurers know how to exploit that discrepancy.

Thompson O’Neil, P.C.
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