In a recent conversation, a friend asked about the life of workers in the Ukraine. In brief, workers in Ukraine, like those in U.S. cities and around the world, are suffering from massive assaults from the imperialists of the world. But given the current war over Ukraine between the interests of U.S./European imperialists and Russian imperialists, it’s important to understand that workers’ interests lie with the workers of the world, that we cannot take sides with any imperialist power. U.S. calls for “democracy” are justifications for increasing the exploitation and oppression of the world’s working class.
In 1993, a strike wave hit Europe. Airline workers in France, steel workers in Germany, civil servants in Great Britain struck against wage cuts and privatization. So did tens of thousands of coal miners in Ukraine, who were joined by workers at large factories in the industrial centers of eastern Ukraine who were facing price increases and a rapid decline in living standards as a result of Ukraine’s independence. The strikes in Ukraine were eventually settled when the government promised pay raises.
But, as with workers in the rest of the world, capitalists in Ukraine were not conceding much to the working class. Instead they instituted an attack in a new form — a banker-led devaluation of Ukrainian currency that undercut wages and increased privatization of production.
In 1993, Viktor Yushchenko (who later became president in 2004) was appointed head of the newly formed Bank of Ukraine. He was a main architect of a 1994 agreement between Ukraine and the IMF (i.e., U.S. and European capitalism). As a result of this agreement,  the price of bread increased overnight by 300 percent, electricity prices went up 600 percent, and transportation prices soared by 900 percent.
Ukrainian grain production was also under assault. The World Bank imposed a first phase of trade liberalization which lifted tariffs on imported grain. As cheap (and U.S. government-subsidized) wheat flooded Ukraine, its farmers, once the major grain producers of Europe, were forced into bankruptcy.
By 2003, Ukrainian per capita income was rising, only to come under attack during the “Orange Revolution” of 2004. Funded by U.S. agencies such as the National Endowment for Democracy and multi-billionaire George Soros’s Open Society Institute, the Orange Revolution began another phase of the U.S. effort to reorient Ukraine under U.S. imperialism and away from Russia. The U.S. favorites in this period were Yulia Tymoschenko, who had made a fortune skimming profits from the sale of Russian natural gas in Ukraine and the U.S.-trained banker Yushchenko.
The Orange Revolution completely undermined the wages of workers who earn some of the lowest wages in the world. According to the German Economic Institute, labor costs in Ukraine are at €2.50 per hour, well below the average of €3.17 in China, €6.46 in Poland, and €21.88 in Spain. An hour of labor in Germany costs €35.66 (one euro = 1.38 U.S. dollar).
The economy and workers’ living standards were further hit with rising oil and gas prices in 2006–08, and then by the global economic crisis of 2008–10. What kept workers alive in this period were continuing (though ever smaller) subsidies of commodities such as natural gas, essential for home heating. These subsidies were paid for by government borrowing. Ukraine, like Greece among others, was in debt to the international bankers.
In 2010, voters, angry at their losses, rejected the Orange Revolution politicians for Viktor Yanukovych, a politician more closely associated with the social welfare system of pre-1993. But pressed by international finance capital to repay Ukraine’s international debt, Yanokovich, like those before him, began negotiations for closer ties to the European Union and the U.S. The deal he negotiated called for massive austerity, like that instituted in Greece. The subsidies that allowed Ukraine’s workers to heat their homes, pensions and other forms of social spending were to be eliminated. In November, 2013, fearing he could not sell this deal to his political base, Yanukovych accepted a temporary loan from Russian imperialists.
Ukraine has some of the largest reserves of coal and iron ore in Europe, and is still a major producer and exporter of iron ore (to China and India) and steel (competing with Germany, France, Russia and others). The privatization of these industries was rapidly accelerated under Yanukovych. Privatization has led to the closing down of steel plants that need modernization, and of many mines. Coal production has fallen by two thirds since 1991, as imported natural gas replaces coal in plants producing electricity. The result has been a situation in eastern Ukraine where many mine workers work in illegal mines often run by criminal networks that offer no protections to workers. That is what capitalism has wrought in the Ukraine.