Seven years ago, this town was at the heart of one of the richest areas of Pennsylvania, built by a booming steel industry that trickled down wealth to other factories and local merchants. Now, the main business strip has been reduced to a string of vacant storefronts, three job-training centers and a handful of taverns that serve as the social center for many of the unemployed.

The seven miles of LTV Corp. steel mills that line the Ohio River are largely empty, and so are the factories and businesses that depended on them.

The hopes of this city of the unemployed were dealt another blow 10 days ago when LTV announced it was filing for reorganization under Chapter 11 of the federal bankruptcy law.

Aliquippa, whose population has shrunk to 15,000 from a peak of 30,000, is one of the hardest hit communities in Beaver County, a Rust-Belt basket case that local officials, business people and union leaders say has finally awakened to the fact that the day of one-industry factory towns has past. Aliquippa is now trying to make the transition to services and high tech.

But there are Beaver counties all over the country, where the loss of jobs in coal, steel, automobiles and related industries have left double-digit unemployment more than three years after the economic recovery.

The problems of areas like this in Ohio, Pennsylvania, West Virginia and Illinois help explain why the national unemployment rate still is high, and why the quality of life for many formerly middle-income factory workers may be eroding.

The unemployment rate last month was 8 percent in Illinois, 9.4 percent in Michigan and 8.9 percent in Ohio, states which, like Pennsylvania, have lost jobs in steel and autos and coal mining and related businesses.

A recent analysis by the Joint Economic Committee showed that, during the past five years, the nation's midsection has sunk deeper into a slump while the 15 East Coast states and California have been booming.

One reason for the disparity, economists said, is that many East Coast states have worked their way out of slumps that affected them earlier.

Now hard times are being felt in the agriculture, petroleum, mining, timber and heavy-manufacturing sectors, all of which are concentrated in the country's midsection.

Growth has come largely in service areas, such as the financial, information and convenience-food industries, which are heavily represented in coastal states.

For example, in West Virginia, where unemployment was 10.4 percent in May, which is the latest data available, employment has dropped from 603,527 in 1980 to 569,899 last year.

West Virginia is the home of some of the country's sickest industries as far as jobs, and, in some cases, production: coal, oil, gas, steel, chemicals, aluminum and glass.

The state has changed some of its tax and other laws to attract services and diversify the employment base, said Lysander L. Dudley, director of industrial development for West Virginia. "Economic development here is like motherhood and apple pie right now," Dudley said.

The state's major industries hit a slump at the same time, Dudley said. "Even if those industries returned to their former production capabilities . . . we would never employ the same numbers of people" because of more technology and the need to be more competitive, Dudley said.

For example, the coal industry is producing more coal this year than last year "with a lot less people," Dudley said.

Canton's unemployment rate of more than 10 percent is the highest in Ohio. The Canton metropolitan area has gone from 59,100 manufacturing jobs in 1979 to 45,700 last year, according to the Stark Development Board Inc., a county-wide private economic-development group. At the same time, other employment has grown from 101,700 to 109,300 last year.

Wholesale and retail trade, finance, insurance and real estate, and other services have grown rapidly. Manufacturing is projected to decline slightly in the next 10 years while other businesses are forecast to swell from 108,600 jobs last year to 132,100 by 1995.

The city of Canton has instituted a number of programs in the past two years, such as allocating $6 million in low-interest loans and grants for new companies, to attract new business to replace the thousands of steel jobs lost.

But while the city gained 328 new jobs in the past 2 1/2 years, "We've lost some, too," said Paula Stein, community liaison for the mayor's office. "We're always going to lose. It takes a long time to come back."

The city is trying to pick itself up with a $34 million hotel, office and parking complex, and the renovation of various historic buildings. But several miles away, local union officials said they are not confident that the remaining jobs in the steel and auto plants there will remain stable.

"Given the fact there are so many factors in the economy right now, any one thing can start a layoff situation again," said a local steelworkers official. "Most of the people who were laid off here, they were going to McDonalds, Burger King, basically service industries. It's pretty hard to support a family on McDonalds."

Beaver County, which once boasted 12,000 high-wage jobs at the LTV plant, now says that McDonalds restaurants is one of its biggest employers. Employment at LTV is down to about 800, and community officials acknowledge that they must convince small manufacturers and service companies to bring in 15 or 20 jobs a shot, rather than 500 as in the old days, to whittle down its 13.5 percent unemployment rate.

Local business and government leaders say that it may take as long as 10 years to turn Beaver County around. One problem has been political bickering among jurisdictions about who should take the lead in economic development and exactly what should be done.

And it is not easy for new businesses to move in once the bickering stops. Beaver County recently lost three opportunities to attract companies to relocate there when it proved too costly to install water, sewers and roads, said Barbara Bateman, vice chairman of the privately run corporation for economic development in Beaver.

To those who suggest tearing down old steel mills to build industrial parks, Bateman says the going rate for wrecking old mills is about $200,000 an acre. The mills' concrete floors alone are about as thick as a one-story building, she said.

Union and business officials in Beaver said that it has taken so long -- at least five years -- for an economic development to gear up because, until recently, most people believed that the downturn in manufacturing was just cyclical and that good times were just around the corner.

Pennsylvania traditionally has been a durable-goods manufacturing state, said Walter Plosila, deputy secretary for technology and policy development for the Pennsylvania Department of Commerce. "Pennsylvania has been the stereotype of smokestack America, and indeed we are not."

In recent years, the state has been trying to improve its image by moving away from dependence on ailing industries and diversifying into services, more white-collar employment and advanced technology, Plosila said.

"East Pennsylvania is our Sun Belt," Plosila said. "The Philadelphia metro area has the lowest unemployment rate since 1974. Philadelphia went from machine shop and durable manufacturing to pharmaceuticals, biomedical and biotechnology and trade center." The state also has attempted to take advantage of its heavy concentration of universities and medical complexes to lure advanced technology and biomedical businesses to the state.

"Some one-industry towns outside Pittsburgh were not modernized when they should have been and some steel plants closed down or are phasing out," Plosila said. "Mill towns are some of the more difficult problems. You aren't going to replace those smokestack steel companies with more smokestacks."

For the state to make the transition to prosperity, it will have to give priority to small start-up companies rather than just trying to lure big ones, Plosila said. "Some states are putting all their eggs in high tech," Plosila continued. "High tech is not the answer. There is not one answer."

In attempting to diversify, Pennsylvania has made great strides, state officials said. The rate of new business formation last year was twice the national average and the bankruptcy rate was below average, officials said.

The unemployment rate fell from the seventh highest in the nation in 1978 to the 21st highest, officials said. Pennsylvania also had its credit rating increased last year, according to the state's Department of Commerce.

However, one of the toughest jobs will be making up for the losses in steel and mining. Employment in steel and other primary metals dropped from 202,000 in 1976 to 104,000 last year. Mining jobs fell from 48,000 in 1976 to 36,000.

At the same time, jobs in services such as education, social services, hotels, engineering, health and legal business increased from 840,000 in 1976 to 1.171 million last year, according to the state's Department of Labor and Industry.

In Aliquippa, the steelworkers local has been transformed into a job-training center, where unemployed steelworkers are taught how to write resumes and interview for jobs in other industries.

"I'm presently going to school for air-conditioning and refrigeration" installation and repair, said 35-year-old John Telesz, whose wife has worked for an insurance company the two years he has been laid off from LTV. He said he and his wife also have expanded their vegetable garden behind their home so they will have more to eat.

Kenneth Barbour, 45, only has worked in steel mills since he left the U.S. Army in 1965, and has no other skills, he said. "Now I'm trying to find something to put to use what I have," Barbour said.

Telesz said he was making $11.30 an hour before he was laid off, and Barbour said he made between $12 and $13.

Barbour said if he tried to go to school to get training, "Most likely they would take a younger person before they'd take me. All I want to do is get a half-way decent job again. If I could just get another job, I could keep on going from there."