As an hourly employee, I'm going to chime in with my 2 cents.
I am probably underpaid for my experience and skills and work load. But I have a great employer. And having had bad employers, I value that. I literally use to work for a company that had me contemplating crashing my car on the way into work. Now, I love my job and enjoy going to work. Also, I get good benefits. And nice perks as surprises. Yeah, I'm probably too loyal, but I earn enough to pay my bill and save too. And I'm happy. (Seriously, I have had some hellish employers).
If your boss can't pay you what you feel you are worth and you like working there, consider having him add benefits. Like more paid vacation days, paid sick days, more holidays off, bereavement days, a % of any customers you bring in... whatever appeals to you. It was vacation days for me, cause I love to travel. And it sounds like you work at a small enough place that they'd be open to ideas.