As someone else pointed out above, there are much more fundamental issues than pay--notably being able to fire poor teachers, elimination of tenure, pay based on merit/not seniority.
I don't think it's a zero sum game - the world changes and different skills are required at different points. New industries are constantly born that require a whole new set of people. The population of the world is always in flux as well - does that mean every additional person has to split the limited resources?
I think a great teacher is a very leveraged way of taking students and giving them passions, goals, and skills. Students who've been lucky to have had these great teachers are the ones who will be passionate and become great in their chosen fields.
Teachers are not the only source of drive or inspiration to learn. Michael Faraday had almost no formal education (and he came from a poor family), yet he rose to become one of the most influential scientists in history.
[He was apprenticed to a bookbinder, which allowed him to read a lot. His interest in science was inspired by a book (https://secure.wikimedia.org/wikipedia/en/wiki/Michael_Farad...), not a teacher!]
Even before Faraday there were tons of self schooled mathematicians who would just write letters to each other with their problems and solutions but I just don't know how common that would be these days.
I basically went to college without going to school first. I had a D average in high school, and something similar in grade school (I was far more interested in making trouble than anything else!)
I didn't need preparation to go to college (and I went to a midwest public ivy); all I really needed was a clear idea of why I should do so. That I got from reading Issac Asimov and Ayn Rand, not from any teacher forcing me to sit still in their classroom.
But a person can be a good teacher without being the best in his area.
In fact some teachers may be willing to settle for the worse pay at a private school in the knowledge that they have the administration's and the parents' backing, and so a more gratifying task. But I am here to tell you that the private schools hire some turkeys--incompetent, idle, with a bad attitude, slipping unnoticed over into dementia, I've seen cases in my own and relatives' experiences. Yes, you can replace them more easily, but you may have shot a school year or a semester before you do.