01:00 AM EDT on Friday, June 17, 2005

CZARIST RUSSIA was inhabited by a subservient class, called serfs, the fruits of whose labor -- beyond that necessary for a meager subsistence -- were taken to enrich aristocrats. In 1861 Czar Alexander II issued an emancipation proclamation, ending this feudal system and freeing the serfs.

Although less draconian than Russia's serfdom, the Rhode Island General Assembly has imposed a stealth form of serfdom upon a group of Rhode Island citizens.

Our "serfs" are not necessarily poor or working-class individuals exploited for the benefit of the rich. In today's Rhode Island, serfdom encompasses the private sector: ditch diggers and doctors; union and non-union workers; and senior-citizen retirees.

And who are the new "aristocrats"? Public-sector employees and their public-sector-union bosses.

In the private sector, compensation is determined by the free market, so, over time, it reflects what a particular occupation is actually worth, as based on skills and supply and demand. Therefore, to be balanced and fair for all workers, the average compensation of public- and private-sector workers should be roughly equal.

Such is not the case in Rhode Island, where average public-sector compensation far exceeds average private-sector earnings -- meaning that on average, public-sector workers are overpaid.

This is not to say that public-sector employees do not provide necessary and valuable services -- we all appreciate the work performed by our police and fire departments, for example. But no matter how high our appreciation, public-sector workers' compensation should be comparable to that of the private-sector workers who ultimately pay them.

U.S. Bureau of Labor Statistics data for 2001 showed that average salaries in the public sector were nearly 25 percent higher than in the private sector ($41,880, against $33,871). The higher pay also accompanied a shorter workweek: 35 hours, instead of 40 (about 14 percent shorter).

But that is just the edge of the compensation chasm separating the public and private sectors. The really big money in public-sector compensation resides in the state-pension system.

Public-sector employees may receive far more taxpayer money in retirement than they did during their working years. Meanwhile, most of the private-sector workers, who pay for the state pensions, will not receive any pension; they will merely get Social Security.

Let's compare the "serfs" on Social Security with one group of "aristocrats": public-school teachers, who, instead of Social Security benefits, receive taxpayer-funded pension benefits:

Private-sector employees contribute 6.2 percent of their pay to Social Security; public-school teachers contribute 9.5 percent of their pay to their pensions. So the contributions are comparable. The benefits, however, are not.

Rhode Island teachers need work only 28 years to get a full pension, with no minimum age at which to start collecting. So teachers can retire at 50-ish and, given current life expectancies, their pension checks may well cover more years than they worked!

Meanwhile, private-sector workers must typically labor for 40-plus years, until they reach 60-something, before becoming eligible to collect Social Security -- by which time our comparably aged retired teachers will have been lolling on the beaches of Florida for a good 15 years.

And while the average Social Security benefit is only about $14,000 a year (the maximum being $23,268), teachers' pensions are calculated according to three consecutive years of their highest pay. So the typical Rhode Island teacher can retire at 50-ish with a pension of well over $50,000 a year -- or about 3 1/2 times the average Social Security benefit, and more than twice the maximum Social Security benefit.

State pensions are legally protected; once a participant's benefits "vest," they cannot be reduced. Social Security benefits are not legally protected; they do not "vest." At its whim, Congress can reduce Social Security benefits, even for those already collecting.

So teachers in retirement need not worry that their pension benefits might be cut, whereas Social Security beneficiaries will always have that possibility hanging over them.

Little wonder that the favorite currency of the realm at the General Assembly is "aristocratic titles" bestowed upon friends and family -- i.e., state jobs!

Why is public-sector compensation so out of whack? The answer lies in the General Assembly's power to tax.

In the private sector, revenues are generated and incomes derived from a voluntary exchange of goods or services. Conversely, in the public sector, revenues are generated and incomes derived from compulsory taxation.

The Democratic Party, which has controlled the General Assembly for some 70 years, is itself to a large extent composed of members of the public-sector "aristocracy."

Meanwhile, the Democrats in the General Assembly -- many of whom intend later to be employed in a state job -- prostrate themselves before the public-sector-union bosses, who are also their de-facto party bosses.

At election time, this party claims to be the one representing "working families." If that were ever true, it is true no longer.

The Democratic General Assembly has enacted a panoply of income, sales, excise, estate, and property taxes, ensuring that everyone in the private sector -- rich and poor alike -- suffers a burdensome extraction of his or her wealth.

Whether the ditch digger buying gasoline, the doctor with a six-figure income, or the retiree hoping to keep his or her home, all will be snared by come combination of Rhode Island's high-tax schemes -- with the proceeds inordinately benefiting their neighbors who happen to be employed by government.

(Public-sector beneficiaries would have you believe that they are taxpayers, too. Nonsense. The money they receive from taxes far exceeds the money they pay in taxes -- so on a net basis, they are not taxpayers, but tax consumers.)

Ultimately, excessively taxing working families reduces their standard of living. The current state-pension system faces a severe shortfall and, absent major reforms during this legislative session, will require a bailout comprising enormous infusions of working-family taxpayer dollars.

The General Assembly has the power to avoid this. It can thoroughly restructure the state retirement system so as to bring back into balance the overall average compensation between public- and private-sector workers.

The extent to which the Democratic General Assembly levels the compensation field, or declines to do so, will for us "serfs" provide an acid-test demonstration of whom it represents: the working families or the public-sector unions.

Thomas C. Wigand is a Middletown-based lawyer.