No, it doesn't. It only requires the assumption that 1) such people score slightly more poorly, and 2) employers begin choosing employees from the tail end of the distribution. A slight difference in scores on the test will reduce the percentage at the tail end out of proportion to the size of the difference. I don't remember the formal name for this, but it's very well known.
I will not quibble about what constitutes 'devastatingly poor' beyond observing that I of course agree that the difference need not be numerically large in order to be devastating. I will again point out that you are assuming that there is sufficient bias in the IQ test that if used (instead of whatever other form of measurement or selection could be adopted) the change will be devastating. That is a significant claim, particularly when it is quite possible that subjective evaluations of intelligence by interviewers are more biased than IQ tests. I expect IQ may be somewhat racially biased. I know for certain that unstructured human arbitration is racially biased. I don't know for sure to which is worse but do observe that it is sufficiently controversial that some evidence is required.
You asked the reader to imagine a world where some assumption holds---which is fine as far as it goes. It becomes an error in reasoning when you jump from "imagine..." to "a good case" without providing evidence that the imaginary scenario applies to reality. Even the bare statement "I assert that IQ tests are more racially biased than whatever is used in their stead" would have made the case at least coherent, albeit still weak.
The argument was in response to the implicit assumption that even if the tests are biased, we shouldn't worry about that as long as they can predict performance. "Imagine" takes the place of the word "if" in there and the intended conclusion is "yes, you should worry about whether the tests are biased, because if they are biased, that would be bad." To make that conclusion I do not need to provide evidence that the imaginary scenario applies to reality.
If I say "imagine that you jumped off a cliff. You'll get smashed. ...
While making the inventory of my personal library and applying the Universal Decimal System to its classification, I found myself discovering a systematized classification of fields of knowledge, nested and organized and intricate, many of which I didn't even know existed. I couldn't help but compare how information was therein classified, and how it was imparted to me in engineering school. I also thought about how, often, software engineers and computer scientists were mostly self-thought, with even college mostly consisting of "here's a problem: go forth and figure out a way to solve it". This made me wonder whether another way of certified and certifiable education couldn't be achieved, and a couple of ideas sort of came to me.
It's pretty nebulous in my mind so far, but the crux of the concept would be a modular structure of education, where the academic institution essentially established what information precisely you need from each module, and lets you get on with the activity of learning, with periodic exams that you can sign up for, which will certify your level and area of proficiency in each module.
A recommended tree of learning can be established, but it should be possible to not take every intermediate test, if passing the final test proves that you've passed all the others behind it (this would allow people coming from different academic systems to certify their knowledge quickly and easily, thus avoiding the classic "Doctor in Physics from Former Soviet Union, current Taxi Driver in New York" scenario).
Thus, a universal standard of how much you have proven to know about what topics can be established.
Employers would then be free to request profiles in the format of such a tree. It need not be a binary "you need to have done all these courses and only these courses to work for us", they could be free to write their utility function for this or that job however they would see fit, with whichever weights and restrictions they would need.
Students and other learners would be free to advance in whichever tree they required, depending on what kind of profile they want to end up with at what age or point in time. One would determine what to learn based on statistical studies of what elements are, by and large, most desired by employers of/predictors of professional success in a certain field you want to work in.
One would find, for example, that mastering the peculiar field of railway engineering is great to be a proficient railway engineer, but also that having studied, say, things involved with people skills (from rhetoric to psychology to management), correlates positively with success in that field.
Conversely, a painter may find that learning about statistics, market predictions, web design, or cognitive biases correlates with a more successful career (whether it be on terms of income, or in terms of copies sold, or of public exposure... each one may optimize their own learning according to their own criteria).
One might even be able to calculate whether such complimentary education is actually worth their time, and which of them are the most cost-efficient.
I would predict that such a system would help society overall optimize how many people know what skills, and facilitate the learning of new skills and the updating of old ones for everyone, thus reducing structural unemployment, and preventing pigeonholing and other forms of professional arthritis.
I would even dare to predict that, given the vague, statistical, cluster-ish nature of this system, people would be encouraged to learn quite a lot more, and on a quite wider range of fields, than they do now, when one must jump through a great many hoops and endure a great many constraints in space and time and coin to get access to some types of educations (and to the acknowledgement of their acquisition thereof).
Acquiring access to the actual sources of knowledge, a library (virtual or otherwise), lectures (virtual or otherwise), and so on, would be a private matter, up to the learner:
A thing that I would like very much about this system is that it would free up the strange conflicts of interest that hamper the function of traditional educational institutions.
When the ones who teach you are also the ones who grade you, the effort they invest in you can feel like a zero-sum game, especially if they are only allowed to let a percentage of you pass.
When the ones who teach you have priorities other than teach (usually research, but some teachers are also involved in administrative functions, or even private interests completely outside of the university's ivory tower1), this can and often does reduce the energy and dedication they can/will allocate to the actual function of teaching, as opposed to the others.
By separating these functions, and the contradictory incentives they provide, the organizations performing them are free to optimize for each:
Another discrepancy I'd like to see solved is the difference between the official time it is supposed to take to obtain this or that degree, to learn this or that subject, and the actual statistical distribution of that time. Nowadays, a degree that's supposed to take you five years ends up taking up eight or ten years of your life. You find yourself having to go through the most difficult subjects again and again, because they are explained in an extremely rushed way, the materials crammed into a pre-formatted time. Other subjects are so exceedingly easy and thinly-spread that you find that going to class is a waste of time, and that you're better off preparing for it one week before finals. Now, after having written all of the above, my mind is quite spent, and I don't feel capable of either anticipating the effect of my proposed idea on this particular, nor of offering any solutions. Nevertheless, I wish to draw attention to this, so I'm leaving this paragraph in until I can amend it to something more useful/promising.
I hereby submit this idea to the LW community for screening and sound-boarding. I apologize in advance for your time, just in case this idea appears to be flawed enough to be unsalvageable. If you deem the concept good but flawed, we could perhaps work on ironing those kinks together. If, afterwards, this seems to you like a good enough idea to implement, know that good proposals are a dime a dozen; if there is any interest in seeing something like this happen, we can need to move on to proprely understanding the current state of secondary/superior/higher education, and figuring out of what incentives/powers/leverages are needed to actually get it implemented.
1By ivory tower I simply mean the protected environment where professors teach, researchers research, and students study, with multiple buffers between it and the ebb and flow of political, economical, and social turmoil. No value judgement is intended.
EDIT: And now I look upon the title of this article and realize that, though I had comparisons to games in mind, I never got around to writing them down. My inspirations here were mostly Civilization's Research Trees, RPG Skill Scores and Perks, and, in particular, Skyrim's skills and perks tree.
Basically, your level at whatever skill improves by studying and by practising it rather than merely by levelling up, and, when you need to perform a task that's outside your profile, you can go and learn it without having to commit to a class. Knowing the right combination of skills at the right level lets you unlock perks or access previously-unavailable skills and applications. What I like the most about it is that there's a lot of freedom to learn what you want and be who you want to be according to your own tastes and wishes, but, overall, it sounds sensible and is relatively well-balanced. And of course there's the fact that it allows you to keep a careful tally of how good you are at what things, and the sense of accomplishment is so motivating and encouraging!
Speaking of which, several netwroks and consoles' Achievement systems also strike me as motivators for keeping track of what one has achieved so far, to look back and be able to say "I've come a long way" (in an effect similar to that of gratitude journals), and also to accomplish a task and have this immediate and universal acknowledgement that you did it dammit (and, for those who care about that kind of thing, the chance to rub it the face of those who haven't).
I would think our educational systems could benefit from this kind of modularity and from this ability to keep track of things in a systematic way. What do you guys think?