real options that could teach him otherwise?
You have to decide that you are worth more and if you are willing to do what it might take to get it. Having been there 7 years, and having been disappointed, it may be that you are getting intangibles (flexible schedule, health care, etc) that have kept you around. But it sounds like those may not be worth as much today. Or maybe for another $20k you could buy your own damn intangibles.
The other person may not have been very good at the technical part, but perhaps a better negotiator. I have been in that one a few times, and nearly always my - let me stress "my", (as in not yours) - only solution was to move to something better. Your mileage will vary, I have no doubt. I am the fix-it guy - not a programmer, but if there was a web or mail server down, or someone's visual basic creation that was working, then quit, etc, I was the one they looked to for a solution, because they knew I would find one.
I worked with others who could not fix things, who were sometimes the people that broke it in the first place. But they were better at schmoozing, buying presents, negotiating, etc, and sometimes made more than I did. But once a boss takes advantage of you, I have found it very difficult to trust them. And if one really is worth more, and IF there is a ready market for their skills, why would they work another day for less? When I got restless I would give the company a chance, because I knew I was worth more, but I never did that until I had at least a glimmer of a better offer. Often they would then relent, but most times, if I had to take it that far I never went back - don't much like the games. I won't play them against each other. Like I said, not so good at negotiation 
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Read through these and think about it - you are smart, and will find a solution, I bet.
https://www.google.com/search?q=approaching+the+boss+for+a+raise+long+time+employee&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla
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