I have instructed in NZ and the USA. In NZ it was at an aeroclub for $8 a flying hour - but gee I would have done it for free!
Here in the States I started on US$14/hr and then we got a raise to $16 and after I got 500 hrs with the school it went to $19/hr - and this is for briefings as well. You could actually make liveable money from it. Schools here vary a lot with some paying instructors $6/hr (and the bosses drive new BMWs) up to independent operators who charge $30/hr for their services and keep the lot.
Aeroplane hire here is a lot cheaper dollar for dollar (about $60 for an older C172), so with that and the instruction it is still a bit less than the going rate in NZ. (Again $ for $)
It is a quandary - we are professionals who put our lives at risk every day in a very skilled job for which we paid quantum amounts of money to qualify, and yet because demand for the jobs is so inelastic we are "price-takers".
We are worth every cent and more but I think it has to be on an hour for hour user-pays basis. It sure makes the student study harder when you explain to them on the first lesson that if they do the work before the rock up to the flight school it is going to be easier on their pocket. Either that or we can go through it one on one for $30/hr - your choice!
It is hard to think of any occupation, even unskilled, that has a lower hourly rate of pay than ours. But then I don't think flight school operators are raking it in either - it certainly isn't a field I would go into with the idea of making a lot of money!
Unfortunately I can't see how it is going to change. When I get training for myself or a BFR I am happy to pay my colleages - why should they work for nothing??!!
As for the rates in the UK, plane rental is sooooo expensive I would certainly have thought there was scope for adequately compensating their instructors on some sort of fair basis. In my part of the world we have 1 in 3 days IFR so I also know the soul destroying wait at the flight
school! As part of our conditions of employment we weren't allowed to leave in bad wx as a prospective student might wander in and want someone to talk to! Now this we didn't get paid for.
Its a battle guys but the one thing that separates the sheep from the goats in this industry is stickability! Hang in there!!