I raised my rates a few months ago, which was an interesting choice because I actually had no work. But it was an important step in my career.
It seems counterintuitive that raising my rates would result in an overload of work, but that's exactly what happened. I'm not sure why, but deciding that my time and my work was worth more than the X dollars I had been getting for a year or so has made my writing better, and attracted better clients. Science resists this logic; it makes no sense that people would be attracted to the concept of spending more money for writing, but I think the reality is that people always get what they pay for. Now, roughly making 3x as much money as I had in the spring, I allow myself to spend more time on writing, get more creative, take more risks, deliver a better product. I feel appreciated, and therefore am a better employee.
What's funny is that none of this happened until I said "I deserve more." Oh, how Hallmark, I know, but there you have it. I come from a family of scientists; I hesitate to belief in auras or energy or luck, but something has changed in my life. I know the work I'm doing is far more interesting and intellectual, and helping people with their graduate school essays seems, well, important. To them and to me.
In the end, I think it really matters who you work for. My current employers have a high regard for my opinion, and don't constrain me. That is nice. I had figured since I was making zero dollars at X dollars an hour, nothing would change if I suddenly started charging X+Y dollars an hour. But things did change. I think people are willing to pay your rate if you really believe in what you're charging--that your time is worth X+Y dollars even if you do all your writing in a blue kimino with a cat on your lap and the E! True Hollywood Story in the background.
Ask for what you deserve, but first, find out if what you deserve is the going rate. My rates were well under what other writers charged, because I still felt guilty about getting up at 10:30 and having a glass of wine while I edited. In the end, those things don't matter; the work product did.
I can't escape the feeling that it was my attitude, rather than external factors, that kept me broke all this time. It goes against what I know about the world, but hell, I learn new things every day.