Thanks for taking the time to write a detailed critic. Now to your specific questions.

From the employee's point of view this will always be a hated service because people hate being tested. Especially the majority who are not naturally gifted but only got by because of cramming stuff into their heads. These are perfectly serviceable programmers who will learn what's needed and do a good job in the industry.

The testing should be the least painful possible since you can’t study. You either know the material or not. If you are actually able to do a good job in industry then you will pass. The entire purpose of the testing is to separate people into those that can do a serviceable job and those that can’t. With normal tests you might be able to cram and pass but not be any good on the job, while with the proposed tests this will not be possible.

In addition, you're not forcing employees to put too much emphasis on a single test for a potentially (hopefully?) large group of employees. Does this become a stressor like an SATs for coders? If the employee doesn't do well are they screwed? Or do you allow them to retest? If so, you've become just like any number of certification services that have come and gone over the years.

I am not sure how you got the idea that this would be a single test. There would ultimately be thousands of different tests.

I doubt any such system would become universal, but even if it did it would be a failure of the testing process if people who are productive workers in a field failed. Every test should be able to separate the competent from the incompetent.

I would imagine that as people gain skills and experience in a field they would do better on the tests. If you do improve you should want to retake the test and demonstrate how you have improved. This is actually a great thing for an employee as you will be able to demonstrate to your boss that you have improved and are worthy of a higher salary.

From the employers point of view you appear to have the opinion that most jobs are in startups. In reality, the huge quiet slowly moving employer base is below the visible portion of iceberg. These are the businesses that just need coders to keep things moving from day to day. They are not startups, never will be, and don't even exist in the world where founders are wanted or needed. There needs in a coder is not a superstar, it's someone who can learn to tow the line, get things done, and keep their heads down and code. A average coder is fine here as long as they fill a niche.

Not at all. If you are an average coder you should get an average mark and get an average job in a company that just wants average coders. Nothing about my proposal changes anything here other than to make it easier to identify who are the average programers and provide them with an un-gameable certificate of what they really know. It also only measures a limited aspect of a person (their skills) and companies will still hire or not on the basis of cultural fit, etc.

Finally, how could you develop a standardized test for all these below the waterline businesses? If a business needs to fill a slot for a person to crank out Java reports for a few years do you test the same as one who needs to fill a position interfacing C++ to POS/IoT devices?

I think you are thinking that there is only one test. There would ultimately be thousands of tests covering all areas. People would take the tests of the skills they want to be certified for. If you are a java developer you would take the java test and I would expect that even something like java would be broken out into sub-categories over time.

Not that idea is a bad way to make money. It's just that you'll likely need to move into a niche and then you'll need to drive test retakes, release cram books, and become another paper certificate mill. Remember when paper CNAs and such were all the rage.

This is the key difference of my idea and all the other certificate mills - you can’t cram for the test. There won’t be an ecosystem of cram books and test prep providers since you can’t cram. You either know the area you are being tested on or you don’t. Once people know this the value of such a certificate rises.