Yep, you're 100% right. People who have the same job can be paid dramatically differently, and the "reasoning" is that one guy is better at things than the other.

I got a 9% raise this year because I outperformed everyone else on my team, but I know that my 9% raise came at the expense of someone who only got a 2% raise. A union contract would give everyone like a 4-5% raise, which people dislike because they always think they're going to be the ones on top of the totem pole.