With school in swing and a city election year approaching, speculation is mounting that the Bloomberg administration is about to reach a contract with the United Federation of Teachers, which represents the teachers in New York City’s public schools.

Mr. Bloomberg stoked this speculation when he said August 24 that he hoped to have a contract in place by the beginning of the school year or shortly afterward. The idea would be to set the school year off on a tone of labor-management amity. By cutting a deal with the teachers, Mr. Bloomberg could also increase pressure on the police and firefighters, whose unions have yet to come to terms with the mayor.

The mayor and his schools chancellor, Joel Klein, struck the right tone when they called earlier this year for eliminating the existing, mind-bogglingly complex teacher contract and replacing it with a simpler, 8-page document. That would give principals more flexibility to manage their staffs without being bound by the arcane union work rules that the chairwoman of the City Council education committee, Eva Moskowitz, rightly points out are more suited to a 19th-century factory than a 21st-century school system. Advocates for excellence in education are also calling for some sort of merit pay for teachers, similar to a program of bonuses for principals that Messrs. Bloomberg and Klein announced last year.

If there’s a formula for compromise to be found here, it may be in management making some concessions on pay increases – perhaps even increases larger than those that went to DC 37, the other big city workers’ union – but only in return for concessions from the union in scaling back the work rules and in tying the pay increases to the performance of individual teachers. For in the end the mayor and Mr. Klein will be judged not by their popularity with the teachers, but by the performance of the students.