Merit pay for teachers? Why?

I just read a little essay on the state union's website, apparently reprinted from the "My Turn" column in Newsweek. And here it is. It's about the continuing idea that teachers should receive merit pay, and why it's a bad idea. I didn't go into this profession to become rich, I became a teacher to make a difference. Now that I'm in the same place teaching some of the same students for two years and establishing myself in the community, I finally feel like I'm in a place I can do this. But this is not a wealthy community with a lot of success in academics. Should I be punished merely for my students' background? Is that fair?