First you need to turn on accessibility features both in the Simulator and in the machine hosting the Simulator.
Launch the Simulator, launch the settings app, select General, select Accessibility, and then switch the Accessibility Inspector to On. In the iPhone simulator (as opposed to the iPad simulator) you will now have a little Accessibility Inspector window permanently overlayed. Annoyingly there’s nothing you can do about this apart from drag it to one side of the screen.
Now on in your host machine go to System Preferences, select Universal Access, and check “Enable access for assistive devices”.
I’ve also recorded a brief screencast showing these steps.