A proposal by L.A. Mayor Eric Garcetti to raise the minimum wage to up to $13.25 per hour drew a lukewarm response Tuesday from the Valley Industry & Commerce Association.

Garcetti made the announcement during a Labor Day rally at Martin Luther King Jr. Park. Under the plan, the minimum wage in L.A. would rise $1.25 in the first year and $1.50 each year following, with the goal of reaching $13.25 by 2017. The current minimum wage is $9 per hour.

Following the 2017 cap, any adjustments to the minimum wage would be tied to inflation.

Stuart Waldman, president of the Valley Industry & Commerce Association, said his group is “concerned” by the proposal, though the Sherman Oaks trade group has postponed taking an official position on the issue.

“We believe it will cost the city hundreds of thousands of jobs, the exact opposite of what it is designed to do,” he said in an email. “We would like to give the mayor an opportunity to address the board directly to let us know what he will do about the jobs that are lost once the minimum wage goes up.”

A study of the proposal from the Institute for Research on Labor and Employment at U.C. Berkeley was requested by the mayor’s office. The study found that “adults, workers of color, and working poor families would see significant benefits from the proposed policy.”

The study also concluded that the plan would increase income an average of $3,200, or 21 percent a year, for some 567,000 workers. The study found some potential negative side effects to the plan, including rising restaurant prices and more manufacturing leaving the city.

The plan would need a majority vote from the L.A. City Council, though that seems feasible as seven council members were present in support at the announcement.