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 crisis.

"Right 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 and Mexico.

-- By Anna Shoup, Online NewsHour