The tentative deal reached this week between the principals union and the city is being hailed as progress, in part because it provides for merit pay of up to $50,000 a year for principals who excel. Those principals, however, will have to manage their teachers without any ability to pay them more or less based on their performance. To many of us in the private sector, it is incomprehensible. The city’s investment banks, to give just one example, put tremendous time and energy into setting bonuses and crafting evaluations that help determine variable compensation. But the pay of the front-line employees in the city’s schools is based on seniority, not on how much their students learn or even how much their students improve.

President Bush touched on the issue yesterday in New York, when he spoke of “increasing the investment in the Teacher Incentive Fund to nearly $200 million.” He said the fund “rewards teachers who defy low expectations.” The fund is federal money to help school districts that offer merit pay to teachers. Billionaires Eli Broad and Bill Gates will also make merit pay an issue in their $60 million political campaign. Reports the New York Times in breaking news of the spend in today’s editions, “Advocating merit pay to reward high-quality teaching could force Democratic candidates to take a stand typically opposed by the teachers unions who are their strong supporters.” It’s always been a mystery to us why the unions oppose merit pay. No one, after all, is talking about reducing the pay of bad teachers, though that would be an improvement on the current system. The discussion is just about paying good teachers more.

It’s enough to make one wonder if what the teachers union really opposes is accountability itself. The teachers union here in New York has shown an encouraging openness to merit pay in the past, but negotiations have broken down over the union’s insistence that the performance bonuses be awarded based on the performance of an entire school, rather than of individual teachers. We’re all for teamwork, but it’s hard to understand why a superb second-grade teacher should be deprived of a performance bonus because she is stuck in a school with a subpar fifth-grade teacher. The current contract between the city and the teachers stretches to the end of the Bloomberg administration, but when it is time to strike a new deal, the principals’ pact will be a model whose principles management will want to consider extending to other city employees.