"I know it is the bottom of the totem pole and they dont need to make a fortune, but it seems as though they are making teh same $20/hr that they were making 10 years ago, even though the rate that flight schools charge has gone up considerably in that time. I can remember when an instructor cost me $35/hr, and the instructor got $20 of that. Nowadays they charge anywhere from $45-$60/hr and the instructor will get $15-$20 of that if he is lucky. Just an observation. Let me know if you agree or if you think I am off my rocker."

I agree with the price hike thing and how much less the CFI gets by comparison nowadays. I think that you answered it yourself with your first few words. Most people think that CFI's are at the "bottom of the totem pole" and as such, not worth much. Most pilots use the CFI as a starting point to get their hours and move on. Very few stay on as true CFI professionals. As a dedicated CFI professional, this entire situation bugs me, more for how worthless Instructing (as a profession) is viewed, but it's how the system is designed.

I agree that any extra costs that occur due to time/economy should be added to the aircraft rental and CFI's should get roughly half of the school's instruction rate. I live in one of the most expensive cities to live in, and in general, the wages here are lower than in many other parts of the country. What I don't agree with is the "Flight schools are not profitable, so we won't pay our staff the wages they should get" mentality. Some flight schools are indeed profitable. I know what the profitable guys are doing vs the unprofitable guys. I've seen it from both sides.