At Los Alamos Laboratory, the Price of Peace Is a Cut in the Work Force : Defense: A place that once thrived on the Cold War now prepares for leaner times. And the town itself is looking for ways to boost its economy.

Since its birth 52 years ago, Los Alamos has been living the American Dream. No unemployment, no poverty, extraordinary schools and a wealthy community.

But the dream depended on the Cold War, the proliferation of nuclear weapons and a booming defense industry.

Those days are over.

In preparation for federal cuts, Los Alamos National Laboratory is reducing its work force by more than 1,000 contractors and employees this year. More cuts are expected next year.

They are the first widespread layoffs in the history of Los Alamos lab, established in 1943 as a secret site for scientists to develop the world’s first atomic bomb.

The layoffs translate to nearly $18 million in salaries lost in the community this year. As laid-off workers scramble for new jobs, city leaders are wondering if the days of economic prosperity are coming to an end.

“I really have no idea what I’m going to do when my severance runs out. I just hope we can afford to stay in Los Alamos,” said Craig Yost, 44, who lost his job this fall after working at the lab for 22 years.

Matthew Albright of the Community Development Corporation, a group working to revitalize Los Alamos’ downtown, cited the loss of lab salaries, but added: “I don’t think we’ve seen the economic impact yet.”

Laid-off residents facing tight budgets may move away, costing the community money, Albright said. Or, he said, the situation could benefit the community as residents keep their money in Los Alamos instead of going on spending sprees in nearby Santa Fe.

In hopes of persuading folks to stay, Albright’s group is sponsoring promotional events downtown.

“We’re kind of depressed. We need lots of parties,” he said.

Most Los Alamos residents hope to maintain their lifestyle, but say the town must change the way it does business.

“The lab has certainly been the bread and butter of this town as long as it’s been around,” said Steven Shaw, a Los Alamos architect.

“We’re definitely going to have to diversify.”

Local business leaders are pitching in to help the community recover. Otherwise, some say they may be forced out of business.

“It could shut us down. That’s the worst case, but it could happen,” said Dave Fox, owner of CB Fox Department Store.

Companies are investing in Los Alamos, building condominiums, renovating banks and developing new businesses. Much of the activity has come since the cuts were announced.

The reverberations of the cuts are having an emotional, as well as a financial, effect on Los Alamos.

“The layoffs have certainly changed the attitude of the people,” said Jan Blevins, who moved to Los Alamos with her husband in the 1950s. “Everyone knows someone who is affected.”

At KBOM radio, where disc jockeys say they are “Dropping the Hits on the Atomic City,” news director Lauren Mitchell broadcasts almost daily reports on community development, tax revenues and economic problems.

“The cuts are obviously tremendously affecting our listeners and the economy of northern New Mexico in general, so it’s our job to keep them informed,” she said.

The community also faces uncertainty in funding as Congress looks at ways to cut the federal budget deficit.

For decades, the federal government has subsidized public services in an effort to attract top scientists to the lab. Now, Congress is warning that Los Alamos County’s $2.8 million and the school district’s $8 million annual payments will end in June, 1996.

County Economic Development Director Fred Brueggeman is lobbying for a one-year extension on federal assistance for the county and schools, and hopes the final federal budget this year includes $5 million to help laid-off workers find new jobs and open small businesses.

The legacy of federal funds has given Los Alamos first-class community services. Now, some community members hope those assets can be lures for tourists, retirees and other sources of money.

There is the highest altitude Olympic-size swimming pool and complex in the world, home of the local team, the Aquatomics. Swim teams from around the world rent the facility to train.

The public library is extraordinary, worthy of a university with its vast collection. There is a ski area, once private and still mostly unpublicized to keep out strangers. The community also has a golf course, an ice skating rink and a small airport. Its parks are verdant, the streets clean and the schools superb.

Most Los Alamos teachers have graduate degrees, the district’s average class size is 18 students, and 80% of Los Alamos graduates go immediately to college. That compares with fewer than 40% statewide.

But Los Alamos Public Schools Supt. Jim Anderson is troubled about his 3,700-student district’s future. He fears the federal government may cut his $8-million annual funding, which amounts to 30% of the schools’ budget.

Schools need the money, Anderson said, because salaries at the lab are high, which drives up the cost of living in Los Alamos.

“If we lost that money, it would be--what’s a really good word for something that’s really bad? Terrible. That’s what it would be,” he said.