Economy is Rust Belt battleground

JOHNSTOWN, Pa. -- A few men sat around the Greyhound bus station the other day telling stories about the good times, when this was a bustling industrial city that attracted newcomers from as far away as Croatia. Nestled in the Allegheny Mountains, with its coal, steel, and railroads, the small city was once known as the "Cradle of the American Steel Industry."

But the furnaces of mills like Bethlehem Steel have not burned here for a decade. Downtown streets that once were filled with department stores are now virtually deserted. As one small factory after another has shut down in the last few years, so little economic opportunity is left that people have begun to pack up and leave, turning the bus station and its diner into a center of activity.

"There are no young people here," said Alysia Beaton, 17, who was headed to Canada to look for work. "Nobody wants to stay here."

It is in Johnstown and other suffering factory towns of the Rust Belt that President Bush sees reason for political concern, and Democrats sense an opportunity. Bush spent last week trying to spread his optimism about the nation's economic recovery and the projected creation of 2.6 million new jobs this year, a message aimed in particular to key electoral states such as Pennsylvania, Missouri, and Ohio.

But locals in Johnstown and much of western Pennsylvania, the part of the state hit hardest by factory closings and layoffs, say they have not seen any evidence of the recovery Bush keeps touting.

"Bush said he's creating jobs. What jobs? Hamburger jobs. We have no job creation here. We have nothing anymore in manufacturing," said George Haidar, 62, as he sat sipping coffee in the diner. "Johnstown is dead."

As both parties gear up for the fall campaign, the continuing loss of manufacturing jobs in battleground states looks like a chink in Bush's armor. Since Bush took office three years ago, the country has lost more than 2.5 million factory jobs, according to the federal Bureau of Labor Statistics. More than 145,000 of those were in Pennsylvania, according to Stephen Herzenberg, an economist with the Keystone Research Center. The sentiment on the streets and in the diners of western Pennsylvania is that the economy is the main concern.

"The biggest issue here is the economy and job creation. I guarantee you there is a lot of anxiety here," said John Andrew Chronowski, a high school teacher who was sitting in a Dunkin' Donuts in Somerset, south of Johnstown.

Pennsylvania voters are often influenced by the economy, according to Terry Madonna, a political analyst at Millersville University in Lancaster, Pa.

"We are a bellwether for the economy. We are sort of a bread-and-butter, meat-and-potato state, but one that is pulled a bunch of ways by the economy," said Madonna. When the economy is bad, Pennsylvania voters tend to vote Democratic, but when it is good, they vote Republican, he said. "Pennsylvania is a test of the arguments that the Democrats have that we are not out of the recession because the net job creation has been anemic."

Often called a two-party state, Pennsylvania has 23 electoral votes that both parties covet. Republicans carried the state three times in the1980s; President Clinton carried it twice. In 2000, former vice president Al Gore narrowly won the state.

While people in the state's urban core generally vote Democratic, Republicans find culturally conservative "Reagan Democrats" in western Pennsylvania. Bush is clearly aware of Pennsylvania's importance: His trip to the state Feb. 12 was his 25th visit since he took office. But while Bush assured Pennsylvanians that the economy is improving, troubled times in the state's industrial cities have persisted for decades. Back in the 1950s, the mills of Johnstown employed 18,000 workers, and another 14,000 men worked in the local mines. The population of the city peaked at 62,000 in 1950s. Then, Bethlehem Steel shut down in the the 1980s, starting a downward spiral. Plagued by plant closings, mergers, downsizing, and outsourcing of jobs to Mexico and China, smaller factories started closing. The city's population has declined by more than half, to about 24,000.

Still, Mayor Donato Zucco speaks optimistically of Johnstown's future. He said the economy is moving from manufacturing to health care, biotech, defense, and technology. He said the abandoned steel mills that run 12 miles through Johnstown, which is located in a valley, now house a number of different businesses. And, though the number of steelworkers has plunged from 18,000 to 3,000, Zucco, a Republican whose father migrated from Italy to work in the steel mills four decades ago, said he believes Bush when he says things are getting better for the nation and for Johnstown, too.

Other residents, however, smirk when asked about Bush's promises of better times. They say the recovery he keeps talking about is nonexistent and point to young people, such as Beaton, leaving as soon as they finish high school or college. Even the Burger King downtown closed in December.

Job losses keep mounting. When Bestform, a lingerie maker, closed its doors two years ago, about 400 people, mostly women, lost work. Last year, Johnstown lost a total of 600 manufacturing jobs. Just two months ago, Emglo, which makes air compressors, moved its Johnstown factory and its 105 jobs to Mexico.

The trend continues throughout the state, as Pennsylvania experienced 290 massive layoffs last summer, according to the Bureau of Labor Statistics, and overall, state officials said, lost 31,000 manufacturing jobs last year.

"I think it's safe to say there is really a sense of anxiety and malaise and a sense that there needs to be some change," said Mark Muro, senior policy analyst for the Brookings Institution Center for Urban and Metropolitan Policy and the coauthor of a recent report, "Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania."

A recent poll by the Pennsylvania Economy League indicated worries about the economy are a major issue for Pennsylvanians, ranking over concerns about war, health care, and education.

"I seriously don't see it if there is a recovery," said Wendy Swope, who was laid off last year from a leather manufacturer. Swope, a Republican who lives in Bedford County, 45 minutes west of Johnstown, eventually studied to be a beautician and now works out of her home. Swope said she has firmly decided to vote for a Democrat because of the bad economy and the fact that American troops are still in Iraq.

Pennsylvanians' frustration over the economy is not very different from that felt across the nation. According to a recent Zogby poll, one of every five voters lives in a household where people worry about losing their jobs, and the fear does not stop at the doorsteps of the nation's blue-collar workers. The poll indicated that 25 percent of the people making more than $75,000 share that worry.

As cities like Johnstown and nearby Bedford try to transform their economies, locals who once worked in factories find themselves in low-wage jobs at Wal-Mart or hospitals.

"I have three children -- two in college, and they all have government loans, now that I lost my job. It's tough," said Rick Diamond, 43, who has been unemployed since Emglo closed.

"There is nowhere in Johnstown where I can think about making the same amount of money . . . I was making $15 per hour," he said. "That's not a heck of a lot of money, but it was nice, and I was satisfied. I was able to raise a family and I had benefits."

Diamond, who is now studying to be a nurse, said he is ambivalent about Bush but expects he will vote for him unless the eventual Democratic nominee can prove that he is the candidate with stronger morals. While the economy is important to him, Diamond said he doubts there will be new jobs coming to Johnstown no matter who is elected.

In Somerset, 74-year-old Mike DiNinno, the owner of the Dunkin' Donuts, doesn't believe the area's economy is recovering. He pointed across a field to a mountain of dirt. One year ago, a red-brick building that housed a creamery stood there, and some of its 90 workers would grab a doughnut or a cup of coffee from DiNinno's shop.

"They said they were moving down South," he said. "I hear things are getting better but not here. I tell you, it's really bad. My sales are down 17 percent."

Locals sitting around the counter sipping coffee on a cold day recently agreed with him. They are all bracing for more factory closings, more layoffs. "They keep saying the economy is turning around," said Chronowski, the teacher, "but instead of doing a 180, it's doing a 360."