Is it legal for an employer to make2 employees choose who should get laid off?

While very unusual, this would very likely be legal. There is no law determining how an employer needs to decide on who is laid off--in theory, as silly as it sounds, it could be drawing straws or "rock, paper, scissors." So an employer probably can make the employees do this as long as:

1) There are no employment contracts governing termination; if there are, their terms would need to be honored;

2) The process as described does not discriminate against an employee on the basis of protected characteristic; i.e. the decision to let go employee A is not made on the basis of his/her race, religion, age over 40, sex, or disability.

But apart from that, as unusual--and probably unfair, and definitely unprofessional--as this is, it is probably legal.

I do not know if it is illegal per se, meaning that you can point to a law on the books that would give rise to a cause of action upon which you can sue or be sued.  But it certainly is not common practice in any industry or I would think very ethical.  I might contact the Department of Labor and ask their opinion on the matter.  If you feel uncomfortable giving your name, etc.,  then do so anonymously.  And I would let your boss know - together if you can - that you feel that this decision is not yours to make but rather his and puts you in a very uncomfortable position.  Tell him that you would prefer that he decide based upon a legitimate reason fr laying one of you off.  Good luck to you.

It is not illegal per se for an employer to have two employees decide who should be laid off in that in the context of your broad question, this happens all the time in business. For example, many times a supervisor of an employee will meet with his or her supervisor to discuss the performance of an employee and make recommendations or the final decision to promote or fire a particular employee.

Consequently, in the context of your question where no specific facts have been stated forming it, it is not illegal for an employer to have two (2) employees choose who is to be laid off at the business especiallyif they are in a supervisory position.