Here's my take on this, for what it's worth.
For those who wish to fly for an airline and couldn't get airline sponsorship because they were either too old or couldn't get a CEP position, instructing serves a very useful purpose.
This is how it has been for years and the forces of supply and demand have dictated low pay for all but the lucky few. The relationship is mutually beneficial for all parties concerned, if it wasn't, the current situation wouldn't exist.
Most instructors I know have taken the instructor route because there is no other viable route to an airline. For the period they are instructing they do the job with a sense of pride and professionalism. They also realise that the poor pay is part of the deal but it is only a stepping stone. The people I feel sorry for are those who would consider themselves career instructors but cannot acheive a decent salary because the market dictates low wages. This becomes a self sustaining cycle and the would-be long term instructors become disenchanted and make moves to get into an airline at the first opportunity. The flying clubs have seen this cycle for donkey's years and whilst they may get fed up of instructors leaving, they balance this against the cost of having to pay 25k+ to keep them.
So, enter the argument for the minimum wage. £3.80/hr (it might still be £3.60 but I think it has been increased). If you try and force the minimum wage onto your employers, you would probably find that your terms of employment would change somewhat. Envisage an employment contract that states your entitlement to the minimum wage... and nothing else. No flight pay, no christmas bonus, no staff discount for rating renewals. £3.60 or £3.80 for every hour you are in attendance and that's it. Whilst it sticks in my throat that I don't get paid for time spent on the ground doing the many tasks that are expected of me, I just accept it. If I took the "I'm not getting out of bed for that" attitude then I would be in a minority of 1. There are plenty out there who would fill my shoes without a moments hesitation. If you do take that attitude then your career advancement stops dead in it's tracks. If you want to build hours and stay current you are going to have to pay and we all know how difficult that is.
Whilst I applaud any effort to increase the living standards for instructors, I can't help but think that trying to force the minimum wage onto flying schools can in this case only end in tears. What would improve the situation would be an instructor shortage, and there aren't many signs of that happening are there ?