I think this problem is best solved by requiring that the state make amends for arrests which turn out to be incorrect. You lose your job? State funds two months of severance (more if there’s an economic downturn and it’s harder to find a job). Evicted? State provides relocation assistance. Etc. this would also probably be a great disincentive for false arrests. Of course there could be unintended consequences, including the state putting more effort to make square pegs fit in round holes.