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Question as stated. I haven’t seen anything to suggest it was punishment for an offence (he didn’t seem to have ever committed any) or that he was only useful for that particular assignment (he was one of the best), so why?

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The theoretical answer I have heard is if he’s simply low ranking as a soldier, he would be taken out on missions but still be relegated to do menial tasks when back at base. I mean that massacre he was a part of? What deep skill was involved. Shooting unmoving targets to execute them. For all we know—but badly not explained on screen—he might be known as a “runt” to his squad and they are just giving him a chance before making him a permanent garbage-man. – JakeGould Jan 3 at 6:32
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Because someone's gotta or else they'd be knee-deep in doodie after a day. – Valorum Jan 3 at 10:02
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Because the Empire started deploying sanitation troops after a trash compactor on a battle station was vandalized by persons unknown. – Wad Cheber Jan 3 at 13:47
    
aaaand... found direct canon evidence that he was indeed peeling potatoes and doing trash as part of his routine training. First Order==Soviet Army. Please see answer update. – DVK-in-exile Jan 4 at 2:37
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I feel it may be revealing too much right now if I straight up mention Finn in the title. – thegreatjedi Jan 4 at 7:34

Out of universe

If you look at 20th century military, especially conscripted ones which is what First Order had - for example Soviet Army, "painting fences", "digging latrines", "cultivating potatoes" was a standard duty for soldiers.

  • Someone has to do it, right? And privates are free, no need to budget for sanitation

  • Boredom is the enemy of the private. Sanitation or any other makework is a good cheap solution. There are stories of privates digging holes one day and filling them up next day.

In-universe

According to the "Before the Awakening prequel book, the timeline was the following:

  1. Finn was a cadet in training
  2. Then, he was called up to deploy first time ever, with Captain Phasma. At that time he was told he was becoming a real stormtrooper, and never saw battle yet
  3. That deployment was to some Outer Rim system, and was basically urban pacification (translated: they were ordered to shoot the leaders of striking miners)
  4. Immediately upon the end of THAT event, Phasma loaded them all up on board SD, and headed to pick up Kylo Ren on the way to Jakku.

Captain Phasma watched FN-2187 on the monitor in her quarters. He’d stopped firing, stopped even moving, and was just standing amid the ever-changing field of moving figures.
She sighed. She’d had such hope for FN-2187. He had shown such remarkable promise. He had shown the capacity to be special.
She picked up the orders on her desk and reviewed them once more. They’d already made the jump to hyperspace, and she knew it would be less than an hour before they reached their rendezvous point to take on their new passenger. Kylo Ren had already transmitted the coordinates for where they would be headed next.
...
She switched off the monitor. He’d be part of the detail when they reached the landing point on Jakku, she decided. Perhaps when someone was shooting back at him, he would understand what it meant to be a real stormtrooper, what it meant to serve the First Order, body and soul.

What that means is that Finn was on the Starkiller not even as Stormtrooper, but as a cadet in training.

So assigning cadets in training to Sanitation seems logical for out-of-universe reasoning above - they are the most useless of soldiers around yet.

Here's how training for cadets is described in the prequel:

They were stormtroopers, but they weren’t quite, not yet. They were cadets, and as cadets they had additional duties aside from their training. Those duties covered everything from maintaining the armory to performing minor repairs on equipment to quite literally moving equipment from one location to another, often by hand but frequently with the assistance of the heavy-lifter droids, when whatever was to be moved was too big to be moved manually. They mopped the floors. They emptied the trash. They worked in the galley preparing meals.

Another theory (UPDATE!!!)

It just occurs to me - the "I was in sanitation" line given to Han was the only actual canon evidence of "Sanitation" job. But was it the truth"?!?!

Finn is always trying to create a positive impression of himself with the Resistance, from the get-go:

  • He tells Poe that he's rescuing him because that's the "Right thing to do" (with Poe quickly seeing through the fib: "You need a pilot!")

  • He tells Rey that he's Resistance (she buys that because she's a romantic 19 year old still playing with X-Wing pilot helmet)

  • He tells Han that he's Resistance (that one lasts about a minute - Han was not a romantic 19 year old even at 19 :)

As such, I am pretty sure telling Han "Hey, I was 1% of my class, model stormtrooper, groomed for promotion by Captain Phasma" isn't high on his list of brand management plans. Far better to pretend to be a lowly "sanitation" worker than top-flight cadet that he really was.

I asked a separate question to verify if we have any proof he was telling the truth: Is there any canon evidence that FN-2187 actually worked in sanitation?

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Also: I believe this is something mentioned in Clerks. – Sobrique Jan 3 at 19:10
    
@Sobrique: What was in Clerks? (For long term reference: Clerks is a movie notably older than Star Wars: The Force Awakens.) – TOOGAM Jan 3 at 21:53
    
nerdcoremovement.com/… – Sobrique Jan 3 at 22:53
    
As a bonus on the two out-of-universe reasons already stated: Once you have a large army you better put it to work. Having a large army costs a lot and you don't need them all the time. Have them do menial work while they're not fighting so they're still around when you need them. And your people may even like it, seeing the military be put to good use. Somebody has got to do the dirty work and military are supposedly proud to serve anyway. – Mast Jan 4 at 9:11

If you look at the only Star Wars universe garbage disposal facility that has actually been portrayed on screen, in episode IV, it should be obvious why you need trained, armed and armoured soldiers working in your sanitation section.

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As funny as this is, I'm not sure it's a real answer to the question... – Emrakul Jan 3 at 22:13
    
I always wondered why they can't just have a rancor as a guard or, better, substitute the whole garbage pit+trash compactor combo with a sarlacc pit as their disposal module – thegreatjedi Jan 4 at 2:42

He was in sanitation for two reasons.

  1. It's a funny reveal. Here is is on a vitally important special ops mission and they never even asked him what his specialty was.

  2. He is the authority on where to find the trash compactor.

Basically, he works in sanitation because it adds humor to the story.

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That is an out-of-universe reason - to make the story more interesting. Most of the time that can be said to be the true reason for a lot of plot-related "why" questions here. Usually we're more interested in the in-universe answers, because we want to know more about the story. – thegreatjedi Jan 4 at 1:29

Although @DVK 's answer is much better than mine, I'll still add my €0,02. Disclaimer: I haven't read the book, in which both Phasma's and Finn's characters are apparently fleshed out a bit more.

I would interpret it as Finn using as a euphemism for being part of a stormtrooper force who basically exterminated an entire village, the same way that Tony Soprano claimed to be in 'waste management' shortly after killing somebody. In this context, 'sanitation' would actually refer to the janitorial duties he had, instead of 'sanitizing' a village, but still it would not make any sense for him to reveal that he was a stormtrooper at that moment.

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It's clear from the novels that "sanitation" means precisely what it suggests; base cleaning duties. "He guided Han and Chewbacca through the sludge to an unmarked portal in the sewers. It was intended only for emergency transport of cleaning supplies, but those in the sanitation crew often used it as a quick entrance point into the base." – Valorum Jan 3 at 12:40
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It's also fairly clear IMO from the movie because his reveal that he was in sanitation is given as an answer as to why he actually has no idea about how to turn off the shields. Also, when Han asks, he seems to know where the trash compactor is. – xdhmoore Jan 4 at 3:02

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