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07 June 2009

What is Your Life Worth?

Or, different ways of visualizing money.

This gets a little fluffy but stick with me here - sometimes when I'm at work I wonder how quickly whatever we're building would get built if it were just me working. By extension of that idea I sometimes wonder how much I could physically produce in my lifetime, and of course we can assign a monetary value to that work. Here:

Median Income x Career Length = Lifetime Earnings

$28,600 x 40 years = $1,144,000

Or $13.92 an hour assuming 2,000 hour years (40 hours a week x 50 weeks).

The income figures were procured from the US Census Bureau here and represent the median income of anyone over the age of 15 who worked in the US in 2005. I based my 40 year career length on the fact that that is how long most pension plans for the military, police, etcetera require you to work to receive full benefits.

So what does this mean? It simply means that at present value (in 2005 dollars, inflation changes this number over time) the average person produces 1.14 million dollars in their lifetime. Why I like to think like this is because it helps me visualize the true cost of a construction project or political plan. It's easier for me to visualize 100 people working for their entire lives than it is to be told X amount of dollars and try to grasp what that really means.


Millennium Park cost $475 million to construct (it was supposed to cost $150 million). Thus, it cost about 415 human lifetimes of work. As opposed to 131, so 284 peoples lives got lost in that one.

What about a trillion dollars? How many lifetimes does it take to accumulate that kind of wealth?

$1,000,000,000,000 / $1,114,000 = 874,126 lifetimes or lives

So next time someone talks about spending a trillion dollars just remember - what they're really talking about is the allocation of almost a millions peoples' lifetime labor.

On a separate note, I remember reading last year that the EPA slightly devalued their estimation of what a human life is worth to $6.9 million from $7.8 million. I'm not going to go into it here too much, but trust me, this number does need to exist so that policy can be drawn up. If a human life is worth a billion dollars imagine what highways and cars would look like. We'd be driving bumper cars at 5 MPH surrounded by bails of hay - at $10,000 we'd look like China. Anyways, why the disconnect between the reality of $1.14 million and our estimation of $6.9 million? Well, my figure is the cold hard monetary value. The EPA's represents all sorts of court cases, what people are willing to pay to extend their life by another month (huge number), etc. The point is that there is this odd disconnect of about 600% between what we're worth monetarily, in the "you're just a number" sort of way, and what we think we're worth.

If only I could somehow get people to project their estimation of the value of human life onto something I could sell...

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