TL;DR: Teacher pay isn't the problem, eliminating bad teachers is.

When I was preparing to run for the Jersey City Board of Education, I spent a lot of time studying that district, specifically, the pay scales, promotion criteria and other structural issues relating to teacher benefits and recruitment, including the union contracts. The single biggest problem that public schools typically face (especially in large urban districts) is that any attempt to reward based on merit (regardless of criteria) is met with fierce, almost violent opposition by the teacher's unions. I know this first hand because a big part of my platform was eliminating seniority pay entirely. I received death threats, but I also received some strong support, mostly from frustrated parents.

The opposition to my position on seniority pay was under the guise that "experienced teachers are an asset to schools and we should pay them accordingly." However, under a pure merit pay system, the more experienced, senior teachers should theoretically be the most meritorious, so they would make more if they were, in fact "better." Obviously, that isn't the case, hence the impassioned opposition.

The opposition to merit pay is not based specifically on the system by which merit is determined, but simply the overall concept of merit pay. The reason is simple, most urban school districts are staffed with a high percentage of people that have no business anywhere close to a classroom, let alone actually teaching in it. During the public comments portion of the Jersey City school board meetings, I would hear teachers complaining about some policy or another and the grammar, body language and word choices used by these "teachers" is not unlike one would expect to find in a prison yard. A teacher ought to be able to, at minimum conjugate "to be" correctly, especially when addressing a public meeting! A complete embarrassment. I'm not saying all teachers in Jersey City are like that, but the many of the highly vocal ones that attempt to pull the political strings in that city certainly are. So any thought of merit pay to them is a direct assault on their cushy position.

In the Jersey City teachers union contract, teachers must arrive no later than 8am and can leave at 3pm. They work no more than 183 days per year, with all holidays off, plus the summers. The average salary is $68,000, for a 7 hour work day, which, discounting lunch is more like 6 hours. The get very nice health plans, pensions, 10 sick days, 3 (or maybe 5, I can't remember) personal days among other benefits. Teachers are hardly underpaid. When I taught at a nice private school in China, I had 9 hour days, making less than half the money with no summers off -- and the students there far outperformed any students I ever taught in the US. Teacher pay has nothing to do with it. Parents in the US aren't as involved and even when they are involved, the machinery of the school bureaucracy make change almost glacial. In China (and when i was in Korea before that,) if a school gets parent complaints, that teacher would likely be fired. In the US, schools never fire teachers over parent complaints. So as a parent, what's the point? It takes an act of Congress to even get your kid transferred to another classroom. Parents in the US are powerless because there is no school choice and there's no market-incentives for schools.

The problem isn't that we don't pay teachers enough -- we pay them what the market will support, the problem is that bad or mediocre teachers are almost impossible to fire. It costs New York city an AVERAGE of $250,000 to fire a teacher. So unless a bad teacher quits or unless there is an obvious dereliction (i.e. criminal activity,) a teacher is pretty much guaranteed lifetime employment.