THe employer still has a lot of power. You can be fired at a moment's notice and be forced into poverty. That's waaaaaay more power than a union has!
edit: I forgot to mention that a meritocracy doesn't exist. People come from different backgrounds and some have had more (or less) opportunities to improve their skills. Rewarding very skilled people is great, but you should also be rewarding less skilled people by giving them more training (which many companies skimp on...).