I think the problem is more complex than just Pay. At least in terms of restoring the pipeline.
Ms. Black mentioned how EAS contracts are being won by 135 carriers nowadays.

Rather than regulation to reduce ATP mins further, why not lift the 9 seat cap on 135 commuter and raise it to like 19 or 25 seats. They could use 2 pilot aircraft/fly under IFR, and hire FO's with commercial/multi creating a "seamless" pipeline from flight school to ATP once again. The 135 carriers could greatly increase capacity.
It's probably not economically feasible to fly these routes with just 9 seats in most cases unless EAS subsidized. The other problem is there are no aircraft in development in this category.
CAPE Air alone cannot produce the FO's the 121 carriers need.

From what I've seen, most graduates aren't taking crop dusting jobs, no, but the part 91 flying has diminished greatly, as evidenced the AOPA president's testimony. Part 135 is mostly single pilot as it stands. So you do have a gap (from 250-700 or so). This I believe does influence career decision making at the very outset.
Everyone says get a CFI but it is an additional expense that people don't always have. As a side note, I believe the CFI mins should be something like 500 hours anyways.

Many people on here want the regional model to implode but its such a haphazard way of solving the issue.