Worried about American competitiveness? Worry about our schools. The No Child Left Behind Act was supposed to fix our broken system of K-12 education by setting higher standards and requiring lots of tests. The White House is pushinig for Congresss to reauthorize the Act (unless it does so, the Act expires in September), but the K-12 system’s still broken.

Of course, some testing is necessary to measure whether students are learning. When I went to high school in the last century, I had to take the New York State Regents exams once a year in every major subject. I hated them, but at least they showed what had sunk into my thick head.

But the No Child Left Behind Act has overdone it – turning our nation’s classrooms into test-taking factories where the curriculum is how to take tests rather than how to think. Teachers across the country are complaining that originality and creativity have been drained from classrooms. Now, it’s all about cramming for innumerable tests. The emerging economy needs critical thinkers, not good test-takers.

The other thing we know about successful classrooms is they require talented and dedicated teachers. That’s the other problem with the Act. It hasn’t included enough money to pay salaries needed to attract the best and brightest into K through 12 teaching – especially into classrooms populated mainly by poor and working-class kids.

When I went to school back in the middle decades of the last century, talented women didn’t have many career paths other than becoming teachers. But then American society changed, and women could become almost anything they wanted to be. As a result, between 1964 and 2000, the share of college-educated women who chose a career in teaching dropped from 50 percent to just 15 percent, according to government data. (Of course, the number of women graduating from college also increased dramatically over this interval.)

Many men as well as women go into teaching for its non-monetary rewards. But that doesn’t mean monetary rewards are irrelevant. The law of supply and demand is not repealed at the school house door. If we want talented people in our classrooms we have to pay for them. The overseers of financial capital – investment bankers and private-equity partners – are raking in millions, but the overseers of our most precious human capital, our children, are barely keeping up with what they earned decades ago, adjusted for inflation.

Congress should reauthorize the No Child Left Behind Act but it should cut back on the tests, and include more money for teachers. At the same time, teachers unions have to take responsibility for ensuring high quality in the classrooms. If teachers want higher salaries, the unions are going to have to accept merit pay. Indeed, that’s the whole point. Great teacher should be generously rewarded. But that also means lousy ones should be sacked.