ERIE -- When Sam Borgia was working at the Smith Meter Inc., factory in the 1980s, every Friday was Black Friday.

"We'd sit there all day, scared to death," recalled the 55-year-old Millcreek resident. "You'd hear a phone ring, and all these heads would pop up over the cubicles to see who it was going to be this time. And if you didn't get a call or a letter, you'd go out to Happy Hour and get drunk."

Mr. Borgia got his pink slip, and from that point on his story dovetails with so many others from this doughty, friendly, close-knit city on Lake Erie: Determined to stay in the place where he'd grown up, he reinvented himself as a small businessman and entrepreneur, building customized closets.

When presidential candidates Sens. Hillary Rodham Clinton, D-N.Y., and Barack Obama, D-Ill., finally visit Erie -- as seems likely -- they will find Mr. Borgia worried about two things.

First, he is wondering how to pay for his employees' health insurance. "I would like to, but I can't afford it," he says flatly.

Second, he frets that his two college-student daughters won't find decent work for decent wages in the place they grew up.

"My father-in-law spent 42 years at the General Electric plant," Mr. Borgia said, "but my older daughter doesn't have that kind of security, and she's worried. She's changed her major three times, and she's really losing sleep over it."

It's a concern repeated again and again by voters in this city of 102,000 people -- 82 percent of whom were born and raised here. They have been watching their wages and their living standards decline steadily in recent years as the region's manufacturing sector struggles to stay competitive globally. Between 7 percent and 15 percent of all Erie's working adults go without health insurance, according to various studies. Some experts believe the number is even higher.

Nearly 19 percent of the region's total labor force of 140,500 people work in manufacturing jobs -- higher than the state or national average -- and while that may be a plus in some ways, there is a downside: Recently, Steris, which makes hospital sanitation equipment, moved to Mexico along with 400 jobs, and Affinia Brake Parts moved to China.

Still, city leaders say, those recent defections don't tell the whole story of a city that has been moving to revitalize its downtown, rebuild its waterfront into a tourist destination, retrain its work force, become a magnet for high-tech companies and embrace its manufacturing past and future.

One warning: If the presidential candidates, or for that matter, the news media, use "Rust Belt" in the same sentence as "Erie," they will do so at their peril.

"Erie always gets a bum rap from the media," Andre Horton, an African-American political activist, told a group of Obama supporters at a meeting Tuesday night.

"They always write 'Rust Belt' stories about us, but that's just an old cliche. We're alive and well and kicking, and while we've seen a decline in manufacturing jobs, Erie's best resources are its people, and in that we are rich!" he said to a cheering crowd of about 100 people jammed into an upstairs room at a brewpub in the city's renovated train station.

Still, the city must grapple with some daunting statistics: Its poverty rate is double the national average, with 15 percent on public assistance. And while Erie was battered by the same economic forces that decimated much of the Northeast and the Great Lakes regions' cities starting in the 1970s, its job losses were less severe, because it was never dominated by one industry as were Pittsburgh and Detroit, for example, said Jacob Rouch, vice president for economic development at the Erie Regional Chamber and Growth Partnership.

"Erie's economy has always been more diversified, with a strong emphasis on small business and entrepreneurship," he said, noting that there is only one large factory -- the 100-year-old General Electric locomotive plant is the region's largest employer -- while the area has always been home to numerous smaller and medium-size manufacturing companies.

"We're not immune to operations closing or leaving, but none are leaving because of Erie's economy," he insisted.

Just as individual workers concocted a Plan B after being downsized, that kind of reinvention took place among businesses, too, said Mr. Rouch, who noted that when Erie Resistor Corp. began changing owners decades ago, employees simply left and started their own companies. Today, there are 35 spinoffs from that original business.

"We've seen this trend over and over again," said Mr. Rouch. "Little things that were hatched in Erie to service the local economy have become export industries" from health care to educational institutions, evolving from serving local populations to those beyond Pennsylvania's borders.

While two economic issues -- the North American Free Trade Agreement and the subprime mortgage crisis -- have dominated political primaries in other states, they won't resonate as strongly in Erie, said Dr. William Garvey, former president of Mercyhurst College in Erie.

"Housing prices never really went way up so they haven't gone way down, either. There have been isolated cases of inflated prices, but really it hasn't hit us the way it has elsewhere," he said.

NAFTA was a big issue in neighboring Ohio's primary, and when former President Bill Clinton came to Erie Wednesday, he was accosted by a lone heckler about his support for agreement, but many city leaders say they don't think Erie residents blame it for their economic troubles.

"NAFTA? I've never been a big fan of it," said Mayor Joseph Sinnott, who supports Mrs. Clinton. "But I don't think it's a big issue here," he added.

Erie did lose nearly 4,000 manufacturing jobs between 2000 and 2003, and while it has gotten most of them back since, at any given time 1,800 and 2,000 remain unfilled.

"We just don't have the trained work force we need," said a frustrated County Executive Mark DiVecchio. A local shipbuilding company, for example, wants to hire 50 skilled employees, "but we can't accommodate them right now."

Not yet, anyway. Mr. DiVecchio, a Democrat, has been vigorously lobbying Gov. Ed Rendell for state funds for a community college that would train young people to replace the region's skilled workers, the majority of whom are between the ages of 55 and 65 and due to retire soon.

That new college would give Erie its fifth institution of higher education, along with Penn State's Behrend campus, Gannon University, Edinboro University and Mercyhurst College. While the region's population is mostly older and substantially blue collar, it has more than 20,000 college students, making it the second "youngest" county in the state after Centre County, said Dr. Garvey.

They include young people like Adrian Ewing, 23, who had to learn the art of reinvention early. The son of postal and steel workers, Mr. Ewing worked in a small factory, lost his job, but rebounded after founding an online bookstore: www.netneato.com. "I'm making good money," he said.

"Still, I have a 3-year old daughter, and while I think I'll be able to afford to send her to a decent private school, I look at our friends and their kids, and at Erie's public schools, and think, something's got to change, fundamentally, or these kids are never going to have a chance. That's where the candidates need to focus all their attention."

At Mercyhurst College, a Catholic liberal arts institution, there are plenty of students walking around wearing Obama T-shirts, but not everyone feels politically engaged.

"I'm questioning the integrity of all three," said Bill Heffernan, 20, of Cleveland, who said he had been a Mitt Romney supporter but is now undecided. "They all make these promises that I know we can't afford, but they're just saying what people want to hear to get elected."

For Mr. Heffernan, national security is paramount. For Lawanda Bender, who works in an adult education center near the city's GE plant, it's the war in Iraq.

"As a mother and as a woman, I have to say that issue is first for me," said Ms. Bender, who said two of her nephews and a stepbrother are serving in Iraq. "We're paying so much money for it, and it's affecting programs like the one I work for."

As an African-American working with the city's indigent population, she has watched unhappily as community block grants have shrunk during the past five years to pay, she says, for the war. While her program and other human service agencies have managed to keep afloat, "the need for services just keeps growing. We recently lost another local plastics company and about 125 jobs, and I think, who will get hit next?"

Then there's 38-year-old Kelly Vest, whose husband, Joseph, is an Iraq War veteran who recently retired after 21 years in the Air Force.

Standing in the East Land Bowl lanes just off Erie's Bay Front parkway, she drags on a cigarette while noting that her e-mail address contains the term "gypsydrifters" for good reason. After her husband left the military, the family moved from place to place looking for work from New Mexico to Florida to Las Vegas. "And everywhere it was the same," she said.

"There were jobs, but for far less than what my husband was making in the Air Force, where he made good money in a job with a lot of responsibility."

The family then moved to Erie to be close to Mr. Vest's ailing parents. After a temporary stint as a postal worker, Mr. Vest now garnishes pizzas for a living.

"We're barely making it," his wife said bitterly. "All the companies talk about 'Oh, we give veterans preference,' which is a lot of hooey. My daughter works at Pizza Hut and would like to go to college, but I don't think it's in the cards. She's already made it clear she's not staying here."

But when asked if she will leave, Mrs. Vest looks shocked.

"Oh, no," she says. "I love Erie. It's a family town. It will all work out."

There are young professionals here who are doing well. Standing outside the downtown headquarters at Erie Insurance Group, the region's second largest employer, Mark Porath says he has a high-paying job with excellent benefits, but worries about his parents.

"My dad is self-employed and pays $1,300 a month for a not-too-good health insurance plan that doesn't let him pick the best doctors," said Mr. Porath, who is 27 and single.

Recently, he bought a motorcycle so he can travel to Cleveland, Pittsburgh and other places on weekends -- a mobile lifestyle is a necessity for a younger person in an isolated place like Erie -- but he's carefully watching one development which could significantly cramp his lifestyle.

"I've heard gas could go to $4.50 a gallon, and that has me really concerned," he said.

Mr. Porath was standing just across the street from the city's snowbound main square, where a statue of Commodore Oliver Hazard Perry carried a reminder not just of his role in defeating the British Navy during the War of 1812, but of the flag he waved in battle, quoting another famous war hero, Capt. James Lawrence: "Don't Give Up The Ship!"

That's pretty much been the Flagship City's credo through good times.

"I liken Erie to Ireland in the early 1990s," said Mr. Rouch, the economic development vice president at the Erie Regional Chamber and Growth Partnership. "The challenge for us here is that we do have jobs, but they're not necessary aligned with the kinds of jobs that a young person might want.

"I know there are droves of people who went to college here, trained as graphics designers or computer programmers and ended up having to go elsewhere. These young people want to come back to Erie, and it's incumbent on us to make sure that happens.

"And it will happen."