As I wrote earlier, the Chicago teachers' strike is not primarily about salary, but salary is relevant. Chicago teachers are well-compensated, which is appropriate, but the question facing the city of Chicago is whether it's getting high quality in exchange for its money.
There are a number of dimensions to the dispute around this, but the key one is that there's a trend in policy circles to push for more reliance on value-added models of teacher performance. The way VAM works, more or less, is that you use standardized tests to determine whether students are learning. But of course that would be much too crude. Parents' income and educational status and so forth is also going to affect how much kids learn. My dad dropped out of high school and could never help me with math homework the way my mom could. If neither of my parents had finished 10th grade, I would have done worse in math through no fault of my teachers. So the VAM models at issue apply various demographic controls.
Teachers and their unions are not big fans of these models. This epic John Ewing post at Valerie Strauss' Answer Sheet blog rounds up skeptical research. One key point the skeptics raise is that there's a lot of year-to-year instability in how teachers score on these models.
On the other hand, this paper from Raj Chetty, John N. Friedman, and Jonah E. Rockoff (PDF) is a typical example of the kind of research that's persuaded VAM fans that this is a good way to proceed:
Are teachers’ impacts on students’ test scores (“value-added”) a good measure of their quality? This question has sparked debate largely because of disagreement about (1) whether value-added (VA) provides unbiased estimates of teachers’ impacts on student achievement and (2) whether high-VA teachers improve students’ long-term outcomes. We address these two issues by analyzing school district data from grades 3-8 for 2.5 million children linked to tax records on parent characteristics and adult outcomes. We find no evidence of bias in VA estimates using previously unobserved parent characteristics and a quasi-experimental research design based on changes in teaching staff. Students assigned to high-VA teachers are more likely to attend college, attend higher-ranked colleges, earn higher salaries, live in higher SES neighborhoods, and save more for retirement. They are also less likely to have children as teenagers. Teachers have large impacts in all grades from 4 to 8. On average, a one standard deviation improvement in teacher VA in a single grade raises earnings by about 1% at age 28. Replacing a teacher whose VA is in the bottom 5% with an average teacher would increase the present value of students’ lifetime income by more than $250,000 for the average classroom in our sample. We conclude that good teachers create substantial economic value and that test score impacts are helpful in identifying such teachers.
I am basically on Team Chetty with regard to this. Others will disagree. But contrary to the impression you'll get reading blogs, it really isn't a question whose answer can be deduced from ideological first principles. My general view is that the wise politician will simply take the fact that teachers don't like being evaluated this way at face value and will offer them more money in exchange for accepting it (that's what we've done in Washington). The Rahm Emanuel approach of pushing an unpopular evaluation model concurrently with a longer school year and other teacher-unfriendly measures produces a backlash, and he seems to be losing in the court of public opinion.*
Politicians sometimes forget that "politician" is one of the least-respected professions in America, so any time there's a standoff between politicians and some better-regarded group of people—cops, firefighters, teachers, military officers, doctors—the tendency is for the politicians to lose.
Correction, Sept. 13, 2012: This post originally misspelled Rahm Emanuel's last name.