There is nothing to this subject that is pleasant discussion. Rebbeim are often not earning a decent income. This is coupled with the financial woes that yeshivos often carry, resulting in few raises that can offset the deficit that the average rebbe experiences.
The trend of yungerleit staying in kollel, then hunting for employment in the chinuch system keeps the supply far greater than the demand, thus the low cost of a rebbe.
But there are other angles, all equally as uncomfortable as topics for discussion. The first question is, how many rebbeim are expert enough in what they do to deserve extra pay? Plenty, who are otherwise wonderful people, and mediocre in the classroom. Being minimally adequate, they are often kept on the job, but without reason to raise their pay. They are easily replaceable if one looks for the same level of skill. It is becoming more common that a rebbe has undergone training of some sort before applying for a job. But this blink of optimism is minimized by the fact that the percentage of applicants for chinuch jobs who have such training is still quite low. And there are opportunities to get the training.
Second question is, the time in kollel is often considered a preparation for chinuch. I disagree with that. It might be a useful part of training for rabbonus, or for teaching in a yeshiva gedola. But elementary and even high school demands a different set of skills (way beyond the knowledge of Torah material). Kollel rarely, if ever, has such a focus.
Third question is, the motive for going into chinuch is a critical issue. It is often that it is not the love of bringing children to launch their lives in an environment of Ahavas Hatorah. More often, it is the belief that entry into the work environment that is not “klei kodesh” is somehow a treif thing to do, and that by default, one must turn to chinuch.
A fourth question concerns the understanding of what comprises the job. Most enter the system believing that they need to prepare a lesson, enter the classroom, and deliver it. It is only after having taken the plunge that one recognizes that the task is many times greater than that. Preparation demands quite a bit, but the need for attention to each talmid is completely overwhelming. The good rebbe, worth every dime, has learned to master this. The mediocre ones look for all kinds of ways to avoid this huge investment of time and effort. Among these, we have the disciplinarians, who are obsessed with the talmidim’s compliance, at the severe expense of generating the passion for Torah and Mitzvos. I know there is a whole lot of generalization here, but these are the kinds of questions we need to entertain when we wish to discuss the rebbe’s pay.
We need to identify chinuch as a profession, meaning that it requires training and a proper match of someone’s nature and skills to the type of employment. As such, it should be reimbursed at an appropriate level. This at least provides a challenging dent to the trend of sitting in kollel, and then, with the strokes of a pen on an application, walking into a classroom of children.
In direct response to the question of the OP, most Rebbeim are underpaid. But way too few have the qualifications to deserve the better pay. This is pessimistic, and things have improved over the past years. But there is a long way to go.