The Junction was prone to booms and busts during its tumultuous history; while the period between 1888 and 1890 was a prosperous one, the period between 1893 and 1900 saw significant poverty in the area due to an economic recession. The Great Depression saw the closing of factories and the end to construction in the area, and the municipality could not support its citizens because of a large civic debt.
Pubs and taverns became permanent fixtures in The Junction, as was the case with many railway and factory workers' towns. By 1903, alcohol was such a serious problem for families and a public embarrassment (as drunks were visible from passing trains), that the town voted to go dry in 1904 and did not repeal this law until 2000, the last area of Toronto to do so.
Toronto annexed The Junction in 1909 and the two have gradually grown together, though residents have retained their community identity and remained very loyal to the neighbourhood, despite further economic hardship. Indeed, the commercial stretch of Dundas Street was all but abandoned until quite recently. The prohibition dissuaded restaurants from establishing themselves there, and certainly bars were not permitted.
The elimination of the prohibition has had a positive effect on the community, however. New restaurants and bars have opened up along Dundas Street, attracting young hipsters, while lower rents make the neighbourhood appealing to artists. Some see The Junction as the next big "hip place to live."