A new mix of economic problems facing voters in Pennsylvania,
a state that has faced earlier financial turmoil as key industries
like steel and mining collapsed, have grabbed the attention of
the presidential candidates in this critical battleground.
But while all three major candidates tout their economic plans
to Keystone State voters, they do so in a state that has struggled
for decades to retain quality jobs and now faces higher health
care costs, rising fuel, energy and food prices, and the housing
now, Pennsylvania's economy remains strong because we worked in
a bi-partisan manner to address the challenges we faced. Our revenues
remain stable so far this fiscal year and we have a record-high
job count at 5.8 million," Gov. Ed Rendell said on Feb. 4.
"But there are storm clouds in the national economic forecast
and we need to continue working together now to ensure residents
and businesses can weather any storm."
Rendell took steps to stimulate the economy in his 2008-2009
budget, which promotes infrastructure investments, encourages
job creation and gives a $400 tax rebates to lower-income families
struggling to pay higher living costs.
Despite the efforts to bolster the economy, February saw a loss
of 10,000 jobs and a rise in the unemployment rate.
"This is the first indicator that the weakening national
economy is beginning to take a toll in Pennsylvania," Rendell
said while urging the state legislature to pass his stimulus proposals.
But economic woes are not new to Pennsylvania. The coal mines,
steel mills and large factories that that once drove the state's
industrial boom shut their doors throughout the 1980s and 1990s.
Many towns have not found a new economic model.
"The biggest economic issue has to do with the lack of enough
jobs and the lack of enough jobs that pay well," said Roberta
Iversen, an associate professor at the University of Pennsylvania's
School of Social Policy and Practice. "With the steel business
leaving, we have to find more ways to create niche markets and
certainly do much more retraining."
Despite the drain in industrial giants, the state was still home
to 50 of the Fortune 500 companies including Sunoco, Comcast and
Rite Aid in 2007. Philadelphia, the state's largest city, is home
to eight of these companies, but many in the city's working-class
suburbs and across the state in Pittsburgh are the blue-collar
voters Democrats continue to target.
"There's not too many jobs out here," Levittown resident
Fred Chamberlain, the vice president of the local boilermakers
union, told NPR's Mara Liasson. "For you to have medical
insurance, you almost have to be in the union. Other than that,
you come up here in the suburbs, there's a lot $9- and $10-an-hour
jobs up here."
Job jitters, rising living costs
The candidates have focused on the economy with good reason.
A Quinnipiac University poll of likely voters surveyed from April
9-13 found that 49 percent listed the economy as the single most
important issue in the primary. The war in Iraq trailed at 27
percent and health care at 16 percent.
In a regional breakdown of voters who ranked the economy first,
Allegheny County -- where Pittsburgh is located -- made up 14
percent, Philadelphia 13 percent, the northwest 8 percent and
the central part 23 percent.
The top economic concern is hard to pin down for the state's
12 million residents. On paper, the statewide median income of
$48,148, ranks in the middle of the United States, according to
the U.S. Census Bureau. But for many, the combination of worries
about job stability, health benefits and mortgage payments added
to increases in daily costs of food, gas and utilities foster
a generalized worry about the economy.
"We are dealing with a waterfall effect instead of a trickle
down that happens to working poor people in [bad] economic times.
It becomes a cascade. Everything gets worse. If they lose their
job, that is the drowning piece," Iversen said.
Across the state, the number of non-farm jobs have risen since
1998. But not all sectors of the economy have been strong. Since
2001, manufacturing jobs have continued to dip from 878,000 in
February 1998 to 648,000 in February this year, according to the
U.S. Bureau of Labor Statistics. The February unemployment rate
of 4.9 percent is lower than the national average but a rise from
4.3 percent a year ago.
For months, Pennsylvania has weathered the housing crisis, but
certain parts of the state have shown early signs of following
nationwide downwards trends. An analysis by the Keystone Research
Center found higher percentages of subprime mortgages from 2006
in the western counties, while counties the southeast - with the
exception of Philadelphia County - have relatively lower. The
national housing crisis stems from subprime borrowers defaulting
on their loans and often ending in foreclosures.
"So far the bursting of the housing bubble has had limited
impact on overall job and output growth in Pennsylvania. But economists
are waiting for the other shoe to drop, and for housing market
troubles to trigger a broader slowdown," said Mark Price,
an economist at KRC.
For the candidates, trade agreements -- specifically the North
American Free Trade Agreement -- have become a common economic
scapegoat as they court the state's 830,000 union members.
But studies show little evidence to back up fears that trade
deals such as NAFTA are a threat to U.S. jobs. One by the Peterson
Institute for International Economics published in February found
that trade has a minimal impact on income inequality in the United
States. Another by Alan Reynolds, a senior fellow at the Cato
Institute, concluded that, "NAFTA was unquestionably good
for Pennsylvania" and since the deal passed in 1993, Pennsylvania's
manufacturing sector has benefited from a rise in exports to Canada